Agricultural Protection Fund – new obligations for purchasing entities

On July 1, 2023, the Act on the Agricultural Protection Fund entered into force to Polish Legal System of Food Law. Compensations from the fund will be paid to agricultural producers who have not received payment for agricultural products sold to a purchasing entity that has become insolvent. The first payments to the fund will be made starting from the second quarter of 2024 for the period from January 1 to March 31, 2024.

Who will be charged with agricultural protection fund fees?

Purchasers who are taxpayers of goods and services tax will be obliged to pay into the fund. A purchaser according to the new Law is an entity conducting purchase, storage, treatment or processing of agricultural products.

How will the agricultural protection fund’s fees be calculated?

The fees will be charged on agricultural products purchased from agricultural producers. The list of agricultural products is set out in Annex I to the Treaty on the Functioning of the European Union. An agricultural producer under the Act is considered to be a natural person, a legal person or an organisational unit without legal personality that is a farmer within the meaning of Article 3(1) of Regulation 2021/2015.

At what rate will fees be made?  

Fees to the fund will be charged at 0.125% of the value of agricultural products excluding VAT tax. The value of agricultural products purchased without VAT from an agricultural producer will be established on the basis of VAT invoices and VAT RR invoices included in tax returns. Purchasers will be obliged to calculate and make payments to the fund without prior notice. Payments will be made on a quarterly basis, by the last working day of the month following the end of the quarter in question.

The fund will be a separate bank account managed by the National Support Centre for Agriculture.

Importantly, if in a given quarter the calculated amount of payment due is zero, the purchaser will not be obliged to submit a declaration on the amount of accrued payments.