Foreign periodicals stuck with 7% VAT, despite exemption for domestic titles

Importers of foreign trade publications are getting short-changed from a flaw in the newly introduced 7% value-added tax (VAT) regulation on specialized trade publications. Under the excise duty tax act, 0% VAT may be applied until 2003 to foreign trade periodicals imported to Poland. However, under another provision, to be entitled to that VAT exemption it is necessary to also be included in a list of publications specified by the finance ministry. But since this list currently contains only domestic titles, the normal rate of 7% must be applied to the foreign publications, a fact that is in violation with the so-called New York Convention, signed by Poland, which establishes that a tax may be levied on imported products only if it applies to domestic ones of the same kind as well. The provision thus puts Polish importers that entered into contracts with foreign publishers before the 7% VAT was introduced at a disadvantage, causing them to loose out on profitable commissions. (Rzeczpospolita, p.B1) M.S.C.