VAT on printing services sends publishing jobs abroad, threatening printers

According to the amended VAT bill that went into effect on January 1, the 0% VAT rate on imported books and brochures as well as specialized periodicals will last until 2003, forcing many Polish publishers to print books and periodicals abroad (e.g. in the Czech Republic). The 0% VAT rate on imported books is an opportunity for them not only to avoid paying the 22% VAT on printing services in Poland, but obviously to avoid paying any tax whatsoever. They can even send paper abroad and ship the books back to Poland under a so-called “refining procedure.” As a result, both the state budget as well as printers in Poland are losing revenue. Printers often have to wait for their VAT refunds from tax offices and publishing companies for up to three months while they are short of funds needed for production, possibly leading many of them to declare bankruptcy. (Rzeczpospolita, p. B1)M.S.-C.