Poland keeps 23% VAT on bottled water while some sweetened drinks pay 5%
Poland applies 23% VAT to bottled mineral and spring water, while non-alcoholic drinks containing at least 20% fruit or vegetable juice can qualify for a 5% rate. The Finance Ministry has rejected a proposed reduction, citing the resulting loss of budget revenue.
Bottled water faces the standard rate
Poland’s beverage tax system applies the standard 23% value-added tax rate to bottled mineral and spring water. Many non-alcoholic drinks containing at least 20% fruit or vegetable juice qualify for a reduced rate of 5%, even when they are carbonated or contain added sugar, sweeteners, caffeine or taurine.
Infor.pl, citing an EY analysis, reports that adding juice concentrate can allow a beverage based largely on water to meet the threshold for the lower rate. Drinks with added juice are also largely excluded from Poland’s sugar tax. The VAT treatment extends to unreturned containers in the deposit system: according to the Finance Ministry’s interpretation, the VAT rate applied to an unreturned bottle follows the rate for the drink it contained.
Sales data show different price sensitivity
The latest figures cited by Infor.pl value Poland’s carbonated-drinks market at about 21 billion zlotys and the plain bottled-water market at 9.9 billion zlotys. Sales of juices, nectars and still drinks were worth 8.9 billion zlotys, energy drinks 3.9 billion zlotys and flavored waters 1.55 billion zlotys.
In volume terms, Polish retail and HoReCa outlets sold 4.26 billion liters of plain water in 2023, compared with 2.06 billion liters of carbonated drinks. In 2015, the respective totals were 3.4 billion and 2.17 billion liters. EY tax partner Dorota Pokrop said water was particularly sensitive to price changes. EY’s estimate, based on Polish market data for 2015–2023, indicates that a 1% increase in the price of water raises consumption of other drinks by 0.83%.
Revenue concerns block a lower rate
According to Do Rzeczy, a proposal to reduce VAT on bottled water was raised at a meeting of the parliamentary Public Finance Committee but rejected by the governing majority. Deputy Finance Minister Jarosław Neneman asked how the resulting loss of revenue would be compensated. The ministry says differences in beverage composition and characteristics justify different rates and that it is not working on a reduction for bottled water.
EY estimates that equalizing the rates at 5% would reduce annual VAT revenue by about 1.82 billion zlotys by 2028, equivalent to 0.039% of GDP. Applying the standard 23% rate to all the relevant drinks would instead increase annual revenue by about 2.04 billion zlotys, or 0.043% of GDP.
Producers challenge the competitive effect
Do Rzeczy reports that bottled-water producer Cisowianka has taken the issue to court and submitted a complaint to the European Commission, seeking scrutiny of why some processed drinks receive more favorable treatment than plain water. EY said it found no other EU country where natural water is taxed more heavily than its direct substitutes.
The industry itself has divergent interests. Water-only producers cannot use the juice-content threshold, while diversified beverage companies can formulate products that qualify for the reduced rate. The government had also planned in 2025 to raise VAT to 23% on alcohol-free beer and wine and energy drinks containing juice as part of measures intended to support public finances. The draft 2026 budget measures were estimated to generate about 18.7 billion zlotys in additional revenue overall.
