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Poland promises 2016 VAT rate cut

  • VAT
  • 15 April 2014 | Richard Asquith

Poland promises 2016 VAT rate cut

As Poland makes progress on bringing its budget deficit under control, the government has stated its aim to reduce the current Polish VAT rate by 2016. The standard Polish VAT rate was increased to 23% in January 2011 as part of an attempt to cope with the financial crisis.

Polish economy slowly recovering

Poland has had a relatively good financial crisis, and was the only economy not to go into recession. Nevertheless, since it had signed-up to the Euro currency convergence criteria, it was required to keep its budget deficit below 3% of its GDP. As the European markets slowed following the 2007/8 credit crunch, this forced Poland to raise its VAT rate from 22% to 23%, and raise its reduced VAT rate to 8%. Poland’s deficit hit 10% of its Gross Domestic Product in 2010.

The 2014 deficit is still on course to hit 4.3%, meaning plans to return the rate to 22% will be delayed. But continuing spending cuts should bring the deficit down to 3% in 2015. This is part of the European Union’s excessive deficit procedure. This will see Poland reach a deficit of 2.5% by 2015.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.