Adrian Maczura

Tax advisor (Poland)
Phone: +48 71 60 60 409

Tadeusz Piekłowski

Customs agent (Poland)
Senior Associate
Phone: +48 71 60 60 411

New regulations on excise duty on natural gas and other gas fuels have been in force in Poland since 1 November 2013. They have extended the list of gas products on which excise duty is imposed. At the same time, the new regulations have allowed more entities to enjoy exemption from that duty. Unconditional exemption from excise duty for natural gas, other gas hydrocarbons and other gases used as heating fuel expired at the end of October 2013.

Extended criteria entitling to exemption from excise duty on natural gas in Poland

Pursuant to the new regulations (Journal of Laws of 2013, item 1231), starting from 1 November 2013 the excise duty has been levied not only on wet liquefied natural gas (CN 2711 11 00) or wet natural gas in gaseous state (CN 2711 21 00), but also on coal, water, generator and similar gases with CN code 2705 00 00 and other gas hydrocarbons in gaseous state (CN 2711 29 00), i.e. methane and other heating fuels. It is clear that the regulations now cover a lot more types of gas, e.g. coke gas, expansion gas and post-flow gases originating from non-organic technological processes, convection gas, blast furnace gas and biogas.

The regulations stipulate that the excise duty is currently due only at the last stage of the transaction preceding consumption and on own consumption of gas products produced by an entity.

The recent amendment also defined two types of entities in the fuel gas trade. They are gas intermediaries and final gas purchaser.

Gas intermediary in Poland

A gas intermediary is defined as an entity which, among other things:

  • effects sale, intra-Community supply, intra-Community acquisition, import or export of gas products, or uses the gas products for purposes liable and non-liable to excise duty, and for purposes on which the excise duty rate is zero;
  • is a company running a commodity exchange and acquiring gas products;
  • is a (commodity) brokerage house which acquires gas products.

Sale of fuel gas to a gas intermediary is not liable to excise duty. The obligation to calculate the excise duty and pay it to the relevant customs office rests with the purchaser.

However, the purchaser does not need to pay the excise duty if it proves that it is a gas intermediary. To this end, it must notify the relevant customs office of the intention to operate as a gas intermediary. The head of customs office then issues an acknowledgment of the notification. If the purchaser presents a copy of that acknowledgment certified to be a true copy, it will pay no excise duty. If it does not present such a document, it will be treated as the final gas purchaser and will be charged for the excise duty on gas at the applicable rates.

Final gas purchaser

The final gas purchaser is defined as an entity which acquires gas products in Poland, imports or acquires them intra-Community, or otherwise comes into possession of gas products, not being a gas intermediary at the same time. Sale of fuel gas to such a purchaser is liable to excise duty.

The obligation to calculate the excise duty and pay it to the relevant customs office rests with the seller. The purchaser must state for what purpose the fuel gas is going to be used. The excise duty rate or the exemption from excise duty will be applied on the basis of that statement.

The legislative amendment has also introduced a number of exemptions from excise duty for the gas used as heating fuel.

Gas used as heating fuel with no excise duty

Exemption applies to the gas used as heating fuel for, among other things, rail transport of cargo and passengers, combined heating and electricity production, agricultural and gardening work, fish farming and forestry and in production of electricity or energy products.

The exemption also applies to the gas used as heating fuel in energy-intensive plants which have implemented solutions to protect the natural environment and improve energy efficiency. Further exemptions go to the gas used for propelling vessels and, with certain limitations, in sailing.

Excise duty exemption – formalities

The new regulations govern, among other things, recordkeeping of gas products, including the scope of information to be recorded. The records may be kept on paper or in computer files. In certain situations listed in Article 32 of the Excise Duty Act, the recordkeeping method is one of the preconditions to enjoy the exemption.

Some other exemptions from excise duty require more formalities like modifying the contract between the seller and the purchaser. The contract should stipulate clearly that the contractual gas products will be used for tax-exempt purposes. Please note that the contracts which were in force when the amended regulation was enacted should be modified until 30 June 2014.

For some gas purchasers the new regulations will add burden. Still, the number of potential beneficiaries of the exemption is huge. In this context, it is worth examining your business in Poland and modifying the contract so as to enjoy the exemption. Therefore, we would like to invite you to contact our offices for comprehensive tax advice in Poland (Cracow, Gdansk, Gliwice, Poznan, Warsaw, Wroclaw).