VAT matrix

Tax absurdities are part of everyday life, which many entrepreneurs encounter. The rules are not only confusing, but are also interpreted in a contradictory manner by both entrepreneurs and tax office staff. One way to combat ridiculous legislation is to harmonise rates on the basis of clear and easily understandable criteria. The most attention so far has been paid to the tax on goods and services. Although it is difficult to count on uniform VAT rates, the latest regulations make it easier to do business.


The new rules, which entered into force on 1 April 2019 (a rather unfortunate date), are intended to harmonise the VAT rates of all products classified as one group. Even more changes await entrepreneurs and consumers in the next year, when the next tax rate unification is planned. At present, the main focus is on the food industry, including the processing industry. The project assumes the adoption of a single tax rate for products classified under one heading. There will therefore be no different rates for domestic and imported fruit, for example.

The VAT matrix is also to be proven effective in the baking industry. Until recently, bread rates were differentiated according to the shelf life. Differential tax rates were also applied to ready-made spices – ketchup and ready-made sauces were subject to a lower rate than the mustard popular on Polish tables. There are more examples, as the employees of processing plants and restaurants know. These two seem to show the problem clearly.

Changes in taxes

The draft of the Ministry of Finance envisages not only greater transparency in the level of rates, but also a lower fiscal burden in subsequent years. At current rates, the fiscal burden will be reduced by one percentage point next year (e.g. from 23% to 22% and from 8% to 7%). Importantly, in the event of a necessary change of rate per product group, the legislator is to apply the principle of a downward equation. For another product group, such as dairy products, eggs, nuts, meat and offal or fruit, a single rate of 5% is to apply.

While popular and widely available products should become more popular, luxury goods will become even more expensive due to changes in VAT. The increase in the tax will cover, among other things, the infamous octopus, lobsters, caviar, crabs and other crustaceans and aquatic invertebrates, as well as the preservatives and prepared dishes containing them. Another group of products whose price increases will be noticeable is fruit and vegetable juices other than 100%. The change in the rate is intended, firstly, to influence consumer decisions (the opposite of carbonated drinks and so-called nectars) and to harmonise the rate of cold drinks, apart from juices, with the tax levied on coffee or tea.

Increased transparency

A clearer system and fewer tax rates are to make things easier for entrepreneurs. The annexes to the Act are to contain fewer items than before.

Although the VAT matrix for food products is the most emotional, the changes in rates combined with their harmonisation will also cover other articles, including electronics, hygiene products, the press, books and toys. The height of others, as for firewood, is not to be changed. It is difficult to judge today how the changes will affect the functioning of entrepreneurs and the amount of budget revenue.