Value Added Tax (VAT) in the Polish Construction Industry

VAT on construction services is 22% under the Polish taxation system (basic rate). A separate rate of 7% applies to housing construction. The latter will be in force only until the end of 2007, at which time it will be replaced by the basic rate.
European Community (EC) countries can use their lower VAT rate on „social construction projects”, these projects defined by legislation. The same situation can apply to Poland, yet for the past several years, parliament has not come to an agreement on either the definition of „social construction projects” or necessary accompanying legislation. As a result, the basic rate of 22% will be in effect after 2007.