What is vat applied to? What VAT for services in 2025?

When running a business, every entrepreneur sooner or later has to face the issue of VAT – or Value Added Tax. Although the concept of tax itself may seem straightforward, the knowledge of rules governing VAT calculation and the application of the correct VAT rates or correct invoicing can pose problems in practice. This is especially the case as regulations can change dynamically – as proven by the VAT Act amendment, which brings significant changes as of 2025.

What VAT rate applies to services in 2025?

Most services in Poland are subject to the basic VAT rate of 23%. Services listed in the annexes to the VAT Act are an exception, for which reduced rates (8%, 5%) or exemption is provided.

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What is VAT and who has to pay it? – value added tax

VAT, or Value Added Tax, is an indirect tax charged to the final consumer, but it is collected at each stage of the economic cycle. The obligation to charge and pay it lies with the taxpayer, i.e. the trader selling goods and services.

According to the Value Added Tax Act, any entity which exceeds the statutory turnover threshold or decides to register voluntarily becomes a so-called active VAT taxpayer. This means an obligation to invoice, charge and pay the due tax and record it accordingly in the tax records.

Classifications and allocation of VAT rates

In order to correctly apply the appropriate VAT rate, it is necessary appropriately classify the product or the service. The Combined Nomenclature (CN) and the Polish Classification of Goods and Services (PKWiU) are of key importance here, as they make it possible to determine precisely which rates should be applied to the given type of goods or services.

In case of doubt, the trader can apply for a Binding Rate Information (WIS), which protects the taxpayer from the consequences of incorrect taxation.

Applicable VAT rates in Poland in 2025

Under the amendment to the VAT Act, the following VAT rates apply in Poland in 2025:

23% – the basic tax rate, applied to most goods and services by default.
8% – a reduced tax rate applied to certain products and services listed in Annex 3 to the Act, e.g. books, certain building materials, catering services or services related to construction, covered by the social housing programme.
5% – another reduced VAT rate, which covers i.e. food, baby pacifiers, paper and electronic books.
0% – the rate applicable to exports, WDT (intra-Community supply of goods) and special cases specified in Article 83 of the Act.
zw. – used for transactions exempted from VAT under the regulations, e.g. in the case of educational services, healthcare or financial services.

Reduced VAT rates for agricultural products and fertilisers

Until 31 March 2025, a reduced VAT rate of 8% applied to:

soil conditioners,
microbial fertilisers,
biostimulants and agricultural lime preparations.

A condition enabling the application of this rate is that the goods should comply with national and EU regulations, including the Fertiliser and Fertilisation Act.

Special procedures and cases

Small entrepreneurs – 4% flat rate

Persons providing transport services, such as passenger transport by taxi, can benefit from flat-rate VAT settlement, at a rate of 4%. This is a temporarily increased form of settlement – the standard flat rate is 3%.

Flat-rate farmers

According to Article 115 of the VAT Act, a flat-rate farmer is entitled to a flat-rate VAT reimbursement at the rate of 7% on the sale of agricultural products. This is an increase compared to the previous rate of 6.5%.

VAT exemptions

Not all services and goods must be taxed. The VAT Act provides for a broad array of transactions covered by the subject exemption, including:

medical and healthcare services,
educational services, including teaching foreign languages,
financial and insurance services,
universal postal services,
sale of buildings which meet certain conditions.

In such cases, the indication “zw.” is used on the invoice, which means that the buyer cannot deduct the VAT.

What is the VAT rate for services in Poland?

VAT on construction services

Construction services provided for housing development projects may benefit from a reduced VAT rate of 8% if they meet the conditions of the social housing programme (e.g. flats up to 150 m²). In other cases, a rate of 23% applies.

What is the VAT rate for electrical services?

The VAT rate for electrical services depends on the type and scope of the services provided and the type of facility involved:

🔸 23% VAT – the standard rate is applied i.e. to:

inspections and measurements of electrical installations,
services provided in non-residential buildings,
services not related to housing construction or not covered by the social housing programme (SPM).

🔸 8% VAT – applicable when:

electrical services are part of renovation, upgrade, conversion or maintenance,
are carried out in buildings covered by a social housing programme (e.g. flats, apartment blocks),
inspections and measurements are part of a comprehensive maintenance service (e.g. including minor repairs or component replacement).

What is the VAT rate for gardening services?

Gardening services classified as PKWiU 81.30.10.0 are subject to a reduced VAT rate of 8% when provided as a separate service. Otherwise, e.g. when they form part of a construction service, the 23% rate applies.

What is the VAT rate for accounting services?

Accounting services are subject to a standard VAT rate of 23%, both for accountancy firms and individual bookkeeping services. They are not covered by any reduced rate or exemption.

What is the VAT rate on hairdressing services?

The VAT rate for hairdressing services is 8%. The reduced rate applies in accordance with Annex 3 to the VAT Act and covers services classified under the PKWiU group 96.02.1.

What is the VAT rate for translation services?

Translation services are generally subject to a 23% VAT rate. However, translators who have not exceeded the sales threshold of PLN 200,000 per year or who provide language teaching services may be entitled to VAT exemption.

What is the VAT rate on hospitality services?

Hospitality services are subject to a reduced VAT rate of 8%, this results from Annex 3 to the VAT Act. This includes i.e. accommodation in hotels, guest houses and other similar establishments.

What is the VAT rate on storage services?

Storage services are subject to a standard VAT rate of 23%, regardless of the type of goods stored. If the service is provided to entities operating as businesses and established outside Poland, such service is not subject to Polish VAT.

What is the VAT rate for agricultural services?

Agricultural services provided by flat-rate farmers are exempt from VAT and the farmer receives a flat-rate VAT refund of 7% from the buyer. However, if the service is provided by an ordinary VAT taxpayer, the 23% rate is usually applied.

What is the VAT rate for IT services?

IT services, including programming, maintenance or IT consultancy, are subject to the standard VAT rate of 23%. No exceptions to the general taxation rules are provided for in this case.

What is the VAT rate on medical services?

Medical services are generally subject to a VAT rate of 23%. However, it is worth remembering that medical services provided by authorised persons or entities, intended as prevention, diagnosis and treatment are exempt from VAT. This exemption is based on Article 43(1)(18) of the VAT Act.

What is the VAT rate for catering services?

Prepared meals and meals intended for sale as unprocessed food are taxed at 5%, meals served in restaurants and catering outlets are taxed at 8% respectively, while other products are taxed at 23% VAT.

How to issue a VAT invoice?

Correct invoicing is crucial for a correct tax return. In accounting systems such as wFirma.pl, invoicing has become automated – after entering the tax ID/NIP number, the partner’s data are retrieved from the ONS, and the VAT rate is automatically assigned to the product in question from the warehouse.

The invoice should include:

details of the seller and the buyer,
date of issue,
the name of the product or service,
quantity, net price, VAT rates, amount due and gross value.

VAT to be paid – what is the settlement deadline?

The deadline of the VAT settlement depends on whether the entrepreneur submits a monthly or a quarterly return. For taxpayers with monthly settlements, the due VAT must be paid and the JPK_V7M return submitted by the 25th day of the month following the settlement month. In the case of quarterly taxpayers (JPK_V7K), the deadline of the 25th day of the month following the end of the quarter also applies. If this day falls on a weekend or public holiday, the deadline moves to the next working day. Timely payment of VAT and correct settlements are crucial to avoid interest and sanctions from the tax office.

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Running a business involves many accounting and tax obligations, which is why more and more entrepreneurs decide to work with a professional accountancy firm. EFEKTA is a modern accountancy firm which offers comprehensive accounting, HR and payroll services and tax advice tailored to the needs of both micro-companies and growing businesses.

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VAT in Poland – what is worth remembering?

The standard rate of VAT in Poland is 23%.
Reduced rates include 8%, 5% and in some cases even 0%.
The 2025 changes apply i.e. to medical devices, hemp-based products, livestock and hygiene products.
The entrepreneur cannot freely choose the VAT rate – this must be done according to the regulations.
When in doubt, use the Binding Rate Information (WIS).
The VAT Act and its annexes specify which goods and services can benefit from reduced rates.

Use the services of our office!

Are you looking for a firm which knows how to properly provide accounting services for companies? We have got it all covered. We will also assist you with the incorporation of your limited liability company or other activities. Write to us at biuro@efekta.waw.pl or find out more at – EFEKTA accountancy firm.

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