Poland's Parliament has approved legislation extending the reverse charge mechanism for exchange-traded supplies of gas, electricity, and emission allowances until 31 December 2026, following an 83-2 vote in the Senate on 31 January 2025 and prior approval by the lower house on 24 January.
The reverse charge mechanism, initially introduced in 2023 and previously set to expire on 28 February 2024, shifts VAT settlement responsibility from the seller to the buyer for these specified commodities. The mechanism is designed to address VAT fraud in energy markets and simplify tax administration for exchange-traded transactions.
Additional provisions
The bill expands the scope of the 0% VAT rate to include a broader range of rescue ships and lifeboats. It also introduces an excise duty exemption for passenger cars registered in Poland when used specifically for test drives.
The legislation provides clarifications on reduced VAT treatment for fertilizers, plant protection products, and animal feed, offering additional detail on the application of preferential rates to these agricultural inputs.
Context
The extension maintains Poland's anti-fraud framework for energy trading while aligning with EU derogation provisions that allow member states to apply reverse charge mechanisms in specific high-risk sectors. The measure reflects ongoing concerns about VAT carousel fraud in commodity markets across the EU, with Poland joining other member states in maintaining targeted reverse charge applications beyond standard VAT rules.
