Amended Excise Duty Act

by Tadeusz Piekłowski and Adam Biedrzycki

20 August 2019

The President signed into law on 29 July 2019 the amended Excise Duty Act to overhaul the rules applicable to, among other things, excise duty on lubricants and oils. The new rules are designed to combat frauds which consist of mixing cheap and expensive products to avoid taxation.

As regards lubricants and lubricating oils, only those with CN code 2710, i.e. mineral oils and lubricants, used to be liable to excise duty. Synthetic oils and lubricants belonged to CN code 3403 and used to be zero rated when they were not used for heating or driving. Consequently, both mineral and synthetic oils and lubricants were excise goods but only the mineral ones were liable to the rate of 1180 zloty/1000 litres if used for purposes other than heating or driving.

The lawmakers believed that this led to mixing the usually cheaper mineral goods with the more expensive synthetic ones to avoid taxation. Following the amendment, lubricating preparations (oils and lubricants) which belong to CN code 3403 (except plastic lubricants) will be liable from 1 November 2019 to excise duty of 1.18 zloty/litre also if used for purposes other than driving and heating. Similar regulations will now apply to certain hitherto non-excise goods with CN code 2710 20 90 (among others, heavy heating oils). They used to be zero rated and now they are subject to the rate of 1.18 zloty per litre.

The amended legislation imposes additional obligations on companies which import goods that belong to CN codes 3403 and CN 2710 20 90 from the European Union and third countries. A lot of entities associated with organisations which purchase such goods may face difficulties due to increased formalities related to taxation of those goods upon importation.

The amended legislation adds goods coded 3824 99 86, 3824 99 92, 3824 99 93, 3824 99 96 to appendix 1 and 2, which means that they are treated as excise goods if they are used for heating and driving (appendix 1). Additionally, those goods are subject to the excise duty suspension arrangement if they are manufactured in a tax warehouse provided that they are used for heating and driving purposes (appendix 2). The goods are zero rated, but being listed as such in appendix 2 to the Excise Duty Act means that they need to be registered/updated whenever they are purchased and sold.

Before the amended act comes into force, you should review the goods you acquire within the Community or import in terms of their CN codes, consider changing suppliers of certain lubricants to domestic suppliers, or get ready for the new obligations on sale and purchase of such goods.

If you have any doubts or questions about the requirements imposed by the new Act, do not hesitate to contact Rödl & Partner experts at our offices in Gdansk, Gliwice, Cracow, Poznan, Warsaw, Wroclaw.