Polish landscape in the area of VAT rates for foodstuffs from the perspective of the neutrality principle

Abstract

On domestic sales, Poland applies two reduced VAT rates of 5 per cent and 8 per cent, and a standard rate of 23 per cent. These rates have been in force since 1 January 2011 and all three rates may apply to foodstuffs. However, the groups of products to which each individual rate applies do not have sharply delineated boundaries. The methodology used by the Polish legislator to define the scope of goods and services subject to reduced VAT rates is peculiar and, in the authors’ view, is to a certain extent in breach of the principle of neutrality of VAT. In this article the authors present: