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Reverse charge on the supply of gas, electricity and CO2 emission allowances sold on exchanges

According to the Act of March 24th, 2023, published on March 9th, 2023, on amending the Act on Enforcement Proceedings in Administration and Certain Other Laws (Journal of Laws of 2023, item 556), on April 1, 2023, Poland introduced a temporary reverse tax on gas in the gas system, electricity in the electricity system and greenhouse gas emission allowance transfer services. These regulations are episodic and will apply from April 1, 2023 to February 28, 2025.
Agnieszka Niedzielska
Tax Compliance Manager, Tax Advisor

The Ministry of Finance announcement

According to the Ministry of Finance, in the announcement published on March 31, 2023, this solution will increase the competitiveness of the Polish stock exchange system and was expected by the interested industries. These provisions were introduced into the Polish legal order pursuant to Article 199a (1) (a and e) of the VAT Directive - this solution is already used by e.g. Czech Republic, Denmark, Germany, Ireland, Italy, Portugal, Romania and Great Britain.

The current solution, detailed in Chapter 1c of Section XIII of the Law of March 11, 2004 on Value Added Tax (Journal of Laws of 2022, item 931, as amended), taxpayers are purchasers, or service recipients of gas in the gas system, electricity in the electricity system and the provision of services for the transfer of greenhouse gas emission allowances, in situations when they are made directly, or through an authorized entity, on:

  1. commodity exchange within the meaning of the provisions on commodity exchanges
  2. regulated market or OTF within the meaning of the Act of July 29, 2005 on trading in financial instruments

and the supplier/service provider, as an entity which is an active VAT taxpayer, does not enjoy a subjective exemption in this tax.

Pursuant to the regulations, a buyer or a supplier is considered mainly as taxpayers who are:

  • a company operating a commodity stock exchange within the meaning of the regulations on commodity exchanges
  • a commodity brokerage house or a brokerage house withing the meaning of the regulations on commodity exchanges
  • a company operating an exchange clearing house within the meaning of the regulations on commodity exchanges
  • the Polish National Depository for Securities or a company to which the National Depository has delegated the performance of tasks referred to in Article 48(2) of the Act on Trading in Financial Instruments of July 29, 2005
  • a company operating simultaneously a clearing house and a clearing house within the meaning of the Act on Trading in Financial Instruments of July 29, 2005
  • an entity holding a license issued by the President of the Energy Regulatory Authority under the Act of April 10, 1997. - Energy Law, allowing trading in gas or energy
  • an entity with an account in the Union Registry referred to in Article 8(5) of the Law of June 12, 2015 on the greenhouse gas emission trading scheme

These are not the only entities that, when purchasing gas, energy or gas emission allowances from entities operating on stock exchanges, regulated markets or OTF, may become entities obliged to settle the tax due on these transactions. That is why it is so important for interested entities to track the introduced changes in order to avoid negative financial consequences.

At this point, it is worth mentioning that in the case of the supply of gas or energy, the purchaser is an active VAT taxpayer whose main activity with regard to the purchase of gas or electricity is to resell them and whose consumption for own purposes of these goods is insignificant. With regard to the service of transferring gas emission allowances, the condition is that the purchaser is an active VAT taxpayer.

The application of the regulation means that the supplier of gas in the gas system, electricity in the power system, or the supplier of services in the field of transferring greenhouse gas emission allowances, does not settle the output tax. In such a case, the seller should issue an invoice that does not include the VAT amount, with a note that the reverse charge applies to this type of transaction. It is the purchaser or recipient who will be obliged to settle the output tax on the aforementioned activities, which, taking into account the principle of VAT neutrality, becomes for the purchaser or recipient at the same time an input tax deductible from output tax.

However, in order to benefit from the above regulations, both the supplier/service provider and the purchaser/service recipient must notify the Head of the Tax Office of the commencement of these activities.

The notification should contain, in addition to the data concerning the person submitting the notification such as his name, name and surname, tax identification number; the date of commencement of these activities and the type of activities performed.

This notice must be submitted before the first action is taken.


In the event of any change in the data contained in the notice, the submitter of the notice shall, within 14 days from the date of occurrence of the change, file a notice of the change in the data contained in the notice, thereby specifying the date of occurrence of the change.

Failure to comply with these obligations may result in a fine for both the supplier and the purchaser. The entity which submits the notification after the deadline or provides data that is not in accordance with reality is also subject to this penalty.

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