Significant tax changes affecting the pharmaceutical sector came into force on 1 January 2011:

  • VAT has been increased until the end of 2013, with the basic rate now 23% the preferential rate 8%, and a new 5% rate having been introduced for items such as basic groceries;
  • the qualification of pharmaceutical products for the preferential VAT rate is now determined by the Polish Classification of Goods and Services of 2008 (PKWiU);
  • the prices of reimbursed drugs and medical devices may not change in line with the VAT increases, as they are set by the authorities. Any price increases agreed within the supply chain may not exceed the maximum prices set in the ordinance of the Minister of Health and the Minister of Finance;
  • there are interim provisions to help the transition to the new rates in situations such as continuous services where consecutive payment or settlement terms are set, and where the tax obligation arose under the new rate but the service was performed under the old rate;
  • there may be further VAT increases in 2012-13 depending on the relative size of the public debt and Poland's GDP;
  • other changes affect VAT exemptions and the application of the 0% rate, including the exemption for medical services, which now applies to medical care services aimed at preventing and treating illnesses, or maintaining and improving health, provided by certain bodies such as healthcare institutions and certain types of medical professional.

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The original publication date for this article was 19/01/2011.