• Service: Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 9/27/2013

Poland - Reduced VAT on medical, pharmaceutical goods, fire-protection equipment 

September 27: The European Commission (EC) announced that it will refer Poland to the Court of Justice of the European Union (CJEU) for its reduced value added tax (VAT) rates for (1) general medical equipment and pharmaceutical products, as well as (2) fire-protection equipment.

Medical equipment and pharmaceutical products

According to the EC release (IP/13/870), EU Member States may apply a reduced VAT rate for medical equipment and other medical appliances if two conditions are satisfied: (1) the goods must be intended to alleviate or treat disability; and (2) the goods must be for the exclusive personal use of the disabled.

Poland’s VAT law, however, goes beyond this scope by granting a reduced VAT rate to medical equipment of general use—such as equipment used in hospitals—and to certain non-medicinal pharmaceutical products, such as disinfectants and spa products.

Fire-protection equipment

The EC release also states that, under EU law, a reduced VAT rate can only be applied to an exhaustively listed set of goods and services; fire-protection equipment is not included. The Polish provision, however, does not comply with EU rules.

The EC issued two "reasoned opinions" in January and February 2013 formally requesting that Poland comply with EU VAT rules (the reasoned opinions were the second step in the infringement procedure). The EC’s referral to the CJEU is the final step in the infringement procedure.

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