Reduction of VAT and excise duty on fuel. Drivers will go crazy with joy, but companies will be in for a cold shower

VAT reduction from 23%. at 8 percent will be clearly felt by drivers, but in the case of entrepreneurs its effect will not be so obvious. For this group, the key will be a reduction in the excise tax rate and security in the form of a maximum price at gas stations.

The VAT reduction announced by Prime Minister Donald Tusk from 23 to 8 percent. and excise duty on fuel will first be visible to drivers on their receipts. In the case of entrepreneurs, however, the impact of such changes on the real costs of business is not so obvious.

For the company, the most important thing is the net price of fuel

As Piotr Juszczyk, chief tax advisor at inFakt, points out, the effects of the VAT reduction on fuel should be assessed differently from the consumer's perspective and from the entrepreneur's perspective. For private individuals, lower VAT directly means a lower price at the pump. In the case of companies, the situation is more complex.

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The expert gives the example of a bakery owner who uses a delivery vehicle only for business purposes and has the full right to deduct VAT on fuel. If you spend PLN 1,000 net on fuel per month, then at a VAT rate of 23%. pays PLN 1,230 gross, of which PLN 230 is deducted. The final cost therefore remains PLN 1,000 net.

After reducing the VAT rate to 8%. the entrepreneur would pay PLN 1,080 gross and deduct PLN 80 of tax. As a result, its actual cost would still be PLN 1,000. This means that Changing the VAT rate alone does not automatically bring savings to the companyif it can deduct the entire input tax – emphasizes Piotr Juszczyk.

Excise duty may be more important

According to the expert, from the entrepreneur's point of view, the net price of fuel is much more important, because it translates into the actual cost of business. And this depends primarily on the level of excise duty and the market situation.

The excise tax reduction in our example would mean a decrease in costs by approximately PLN 50. This means that the entrepreneur will pay approximately PLN 950 net. To ensure that gas stations do not increase margins and, as a result, the net price does not increase, security is to be introduced in the form of a maximum price – explains the tax advisor.

As Juszczyk reminds, the reduction in indirect taxes alone does not guarantee a proportional decrease in costs on the part of recipients. Much depends on whether gas stations do not increase their margins at the same time, which could limit the effect of the changes. The expert recalls experience from the period when the anti-inflation shield was in force. After restoring the VAT rate from 8%. up to 23 percent fuel prices at stations have not actually increased. This suggested that previously, with a lower tax rate, margins could have been correspondingly higher.

As a result, some entrepreneurs could paradoxically incur higher net costs during the period of reduced VAT than after its subsequent increase. For this reason, possible mechanisms limiting the increase in net fuel prices could also be important.

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