Poland: Company formed by local government not VAT payer; excise duty exemption depends on rate applicable when energy produced

Summaries of recent Supreme Administrative Court decisions 

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October 2, 2025

The Supreme Administrative Court recently held that:

  • The activities of a company established by a local government unit, whose sole purpose is to carry out local government tasks, cannot be regarded as economic activity within the meaning of the Value Added Tax (VAT) Act (case file I FSK 678/21).
  • For the purpose of determining the amount of excise duty exemption available to companies generating energy from renewable energy sources (RES), the decisive factor is the excise duty rate applicable at the time the energy is produced and fed into the power system (i.e., delivered for consumption/released) in accordance with Article 30(1) of the Excise Duty Act 2008, rather than the rate effective at the time of offsetting the excise duty due on electricity for the subsequent periods referred to in Article 30(2) of the Excise Duty Act 2008 (case file I FSK 1519/21).

Read a September report prepared by the KPMG member firm in Poland

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