Poland required by ECJ to raise reduced VAT on fire services

Sun 18th Jan 2015

Poland has been requested to reclassify supplies to the fire service from the reduced VAT rate of 9% to the standard VAT rate of 23%.

The European Court of Justice (ECJ) held that since such services were not entitled to benefit from the reduced rate as per the EU VAT Directive (Annex III), the country was in violation of EU VAT rules. It would therefore be required to reassess the Polish VAT rates. Poland had claimed that such a change would impose unsupportable financial strain on the fire service. However, the ECJ rejected this claim, and that Poland was obliged to follow the EU VAT Directive.

On a number of occasions, the ECJ has ruled against Poland on reduced VAT rates.  In 2011, it required Poland to raise the VAT rate on children’s clothing to 23%.  Whilst other countries, such as the UK and Ireland, have reduced or nil rates, the ECJ will only grant such a derogation if it is agreed at the time a country joins the European Union.