The rate of VAT

The VAT rate for photovoltaic and heating installation services

The amount of VAT for the above services requires VAT taxation at a rate of 23%, although in some cases the legislator has allowed a preferential rate of 8%. The determining factor here is the usable floor area of the single-family building in which the installation is planned.

Statutory regulations on VAT

The Act of 11 March 2004 established the amount of VAT for various products. For photovoltaic or heating installations, Article 41(12)–(12c) of the Act applies, specifying the situations in which the preferential 8% rate is allowed.

The above rate applies to the construction, renovation, thermal upgrading, modernisation or reconstruction of buildings or parts thereof, if they were previously covered by the social housing programme. Specifically, this concerns:

• houses with a usable floor area of no more than 300 m², or
• flats with a usable floor area of no more than 150 m².

Interpreting the above provision, it can be concluded that the preferential VAT rate applies only to installations for private use. This is the sole condition when purchasing heating installations, but there are additional conditions when purchasing a photovoltaic installation.

VAT regulations for photovoltaic installations

The 8% VAT rate applies to photovoltaics only when installing solar panels on the roof or ground of a house with a usable floor area of no more than 300 m².

Under the current legal framework, however, you need to be aware of the different VAT rates for investments in photovoltaic and heating installations. Any errors in tax settlement may result in the need to pay overdue tax or additional fiscal-penal sanctions.

VAT rate for houses with a usable floor area exceeding 300 m²

Residents of houses with a usable floor area greater than 300 m² can count on partial application of the preferential 8% VAT rate. In the situation described, the tax base should be divided proportionally based on what part of the building falls within the usable floor area indicated by the Act. That part will be subject to 8% VAT. The part exceeding the usable floor area will, in turn, be subject to 23% VAT.

The differences in tax regulations when using RES in Poland often require the help of experts, so that a person does not make a mistake and can meet all the legal requirements.

VAT rate for installations purchased by a company

Heating and photovoltaic installations purchased by companies are in every case subject to a VAT rate of 23%.