VAT exemption on goods for flood victims – key information

 In the face of recent disasters, such as floods, rapid humanitarian aid plays a key role. One element of support is the import of goods intended for victims. The regulations allow the use of exemption from customs duties and VAT. Such exemptions aim to accelerate the delivery process of aid while minimizing costs related to import.

0% tax rate

According to the Regulation of the Minister of Finance dated September 17, 2024, amending the regulation on reduced rates of tax on goods and services, the tax rate reduced to 0% applies to the supply of goods referred to in Article 7(2)(2) of the Act on tax on goods and services and the provision of services referred to in Article 8(2) of the aforementioned Act – for purposes related to aid for those affected by heavy atmospheric precipitation or floods in September 2024. The reduced tax rate applies only to supplies of goods or services rendered to:

• Public benefit organizations within the meaning of the Act of April 24, 2003 on public benefit activity and volunteering;
• Local government units;
• Medical entities within the meaning of Article 4(1) of the Act of April 15, 2011 on medical activity (Journal of Laws 2024, item 799);
• The Government Strategic Reserves Agency.

Importantly, the reduced tax rate applies on the condition that a written agreement is concluded between the taxpayer making the supply of goods or providing services and the entity, from which it follows that the delivered goods or provided services will be used for purposes related to aid for those affected by heavy atmospheric precipitation or floods in September 2024.
The zero VAT rate applies to donations of goods and free services transferred from September 12 to December 31, 2024. The value of the donation must be documented. 

Method of settlement

Donations for flood victims are settled according to general rules. Settlement according to general rules means that there are no special preferential provisions for this form of donations, so the same rules apply as for other donations. Entrepreneurs who make donations cannot include them in tax-deductible expenses, regardless of whether they donate cash, goods, or items.
Donations made should be deducted in tax returns, while taxpayers using flat-rate tax on their income may only deduct 100% of donations made for charitable and care purposes from their income.

Summary

The VAT exemption on goods donated to flood victims constitutes significant support for those affected. Thanks to this solution, companies can provide material assistance without additional tax burden, which increases motivation to provide support. However, it is important to comply with key rules.
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