VAT rates in 2024 – 8% for beauty industry and other changes

The rules and rates of taxation are established by the VAT Act, specifically Section VIII and its appendices. In Poland, the standard VAT rate is 23%, but there are also provisions for reduced VAT rates.

Basic VAT rate

The basic rate, applicable to most goods and services, is still 23% in 2024. It is the highest rate and covers a wide range of products, from foodstuffs to clothing to electronics and services provided to businesses and individuals.

Reduced VAT rates of 0% until April 1st

Under current regulations, a VAT rate of 0% is applied to two main categories: Intra-Community Transactions (ITAs) and exports of goods. This means that transactions related to international trade are subject to a zero VAT rate, to promote the development of exports and foreign trade.

It is worth remembering that until March 31st, 2024, there are reduced VAT rates for food goods listed in items 1-18 of Appendix 10 of the VAT Law. The rate reduction from 5% to 0% applies to a wide selection of products, including meat and edible offal, cereals, fruits and nuts, dairy products, or fats.

Reduced VAT rates: 5% i 8%

The reduced rate, aimed at facilitating profit generation in selected industries and supporting the economic sectors specified in the law, is 8%. It applies to foodstuffs, hotel services, selected tourism-related services, as well as books, magazines, and certain construction-related services, among others.

A VAT rate of 5% applies to products listed in Annex 10, which mainly includes foodstuffs, baby and children’s pacifiers, as well as disks, tapes, and solid-state type durable memory devices.

Starting on March 31st, 2024, a reduced rate of 8% will be applied to services and products in the beauty industry. The reduced rate will apply to beauty and facial care services, as well as beautification services that don’t require medical expertise. Additionally, manicures, pedicures, and eyebrow and eyelash styling services will also be eligible for the reduced rate. However, healthcare treatments and invasive procedures such as tattooing, piercing, tanning beds, massages, and plastic surgery will not be included in this reduced rate category.

• 96.02.13.0 Beauty, manicure, and pedicure services
• ex 96.02.14.0 Beauty, manicure, and pedicure services provided at home
• 96.02.19.0 Other cosmetic services

Subject exemptions

Article 43 of the Law defines the scope of activities that can be exempted from VAT on the sale of specific goods or selected services. Among the exempted products and services are:

• Supply of goods used exclusively for purposes related to exempt activities. In the case of the purchase, import, or production of these goods, the entity making the supply is not entitled to reduce the amount of output tax by the amount of input tax.
• The supply of buildings, where the law sets specific conditions for entitlement to the exemption.
• Provision of universal postal services.
• Services related to medical care.
• Educational services, including private teaching and language instruction.
• Financial and insurance services.

When a business sells goods or provides services that are exempt from VAT, it uses the ZW rate on the invoice. In practice, this means that the buyer is not allowed to deduct VAT from this type of invoice.