Poland | 2019 Budget Allows 5% VAT Rate Cut for eBooks from April 2019

The Polish 2019 budget has recently been enacted providing for, amongst other changes, the application of the special reduced VAT rate of 5% to all books including e-books as of 1st April 2019.

The amended legislation provides for the following measures, which unless otherwise stated, come into effect as of 1st April 2019:

  • Introduction of the “binding rate information” ruling, which will provide businesses with official, binding information on the correct VAT rate to apply to their products;
  • Simplification of classification codesapplicable to reduced rate supplies as follows:
    • Goods will be classified under CN codes instead of PKWiU;
    • Services will be classified under PKWiU 2015 instead of PKWiU 2008;
  • Extension of the scope of the reduced 8% rate of VAT to include:
    • Both printed and electronic newspapers, magazines, periodicals and journals; and
    • As of 1st January 2020, all spices including mustard, paprika and also processed spices (such as pepper, nutmeg and thyme).
  • Extension of the scope of the special reduced 5% rate of VAT to include:
    • Electronic books as well as other books without an ISBN number currently taxed at the standard 23% VAT rate; and
    • As of 1st January 2020,
    • Tropical and citrus fruit and certain nuts;
    • Baked goods including bread, pastry products and biscuits;
    • Soups, broths, homogenised and dietary food, including food for special medicinal purposes;
    • Food, products and accessories intended for babies and young children; and
    • Hygiene/sanitary products.

Currently the 5% special reduced rate applies to certain printed books and periodicals; certain food products, drinks, fruit and vegetables; and, specified agricultural products.