VAT – value added tax

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Value added tax (VAT) in Poland as well as in the entire European Union is a general, widely used consumption tax, calculated on the basis of value added to goods and services. This applies in principle to all goods and services purchased and sold for use or consumption throughout the European Union. Therefore, goods that are exported or services that are provided to customers from abroad (countries that are not obliged to pay VAT) are usually not subject to VAT. On the other hand, the import of goods is taxed. This is because, as a rule, this system is to be fair to all EU producers, so that they can compete with each other on equal terms that apply on the European market. The VAT taxpayer in Poland must be every entrepreneur who performs some services as part of his activity.

The value added tax is:

  • general tax, which in principle applies to all commercial activities involving the production and distribution of goods and the provision of services.
  • Consumption tax – ultimately borne by the final consumer. It does not apply to companies.

Why do all EU countries benefit from VAT?

  • At the time of the creation of the European Community, the original as many as six EU countries used various forms of taxation, most of which were cascading taxes. These were multi-level taxes, each of which was collected from the actual value of production, at each stage of the production process, which consequently prevented the determination of the actual amount of tax actually included in the final price of the product. As a consequence, the risk arose that EU countries subsidized their exports deliberately or accidentally by overestimating the taxes subject to reimbursement for this activity.
  • Therefore, an effective, uniform, neutral and transparent system of taxation of goods and services was born, which was adopted among all EU members.

How do you look like charging VAT?


The VAT due for any sale is the percentage of the sale price. Double taxation is avoided and the tax is paid only, on added value, at every stage of production and distribution. In this way, the final price of the product is equal to the sum of the added values ​​at each of the previous stages.

The most reliable source of information on current VAT rates for a specific product in a given EU country is the tax authority of that country. The following VAT rates are adopted in Poland: 0%, 3%, 5%, and 23%. VAT deducted some services related to education, dental practice or financial services.

Tax fraud

Many companies use methods that rely on inefficient or ineffective attempts to extort VAT. This is a very common practice on the Polish market. Every year, millions of zlotys are lost to the State Treasury, which results precisely from this crime. Nevertheless, this procedure is flourishing and is doing well. It is a prohibited act and severely punished, including imprisonment.

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