- The Provincial Administrative Court in Warsaw issued a judgment (ref. no. III SA/Wa 2083/23) regarding the taxation of electricity and gas transactions at negative prices in the Polish energy industry. The case involved disputes over the application of the reverse charge mechanism for clearing such transactions.
- The company in question sought a ruling on the taxation of transactions at negative prices and argued that the reverse charge mechanism should be applicable. However, the Director of the National Tax Information disagreed, stating that in the case of negative prices, there is no concept of payment, making it impossible to determine the taxable amount.
- The Provincial Administrative Court ruled that the VAT Act only indicates the supply of electricity and gas, and therefore, the reverse charge mechanism cannot be applied to transactions involving trading in electricity and gas at negative prices. The court upheld the position of the tax authority and dismissed the company’s complaint.
- This judgment is significant for the energy industry as it confirms that transactions at negative prices are not eligible for the VAT reverse charge mechanism. Energy market operators will need to adjust their settlement procedures to comply with this decision and avoid potential tax consequences.
Source MDDP
