The same investment, two VAT rates
2026-04-17 · Małgorzata Dopierała, Damian Czyczyro, Przemysław Kostera
In brief. The supply of a medical device carries an 8% VAT rate, general construction works — a 23% rate; the same investment can therefore have two rates on one invoice. The classification is determined by the boundary of the medical device within the meaning of Regulation MDR (EU) 2017/745, not by accounting convenience. The split of rates is worth fixing in the contract before work begins.
One contract, one contractor, one acceptance — and two different VAT rates on the same invoice. That is not the accountant's error, but a consequence of a medical gas installation being at once a medical device and a construction site.
Why is the same installation sometimes invoiced at two different rates?
Because one scope conceals two different activities: the supply of a medical device and ordinary construction work. The reduced 8% rate is attached to the device, not to the whole building site. Chases, wall openings, enclosures and general building work follow the standard route.
It looks like accounting routine. In practice it decides whose bid looks cheaper — and who, years later, will pay the difference with interest.
Where does the boundary run between a medical device and construction works?
| Scope of works | VAT rate | Basis of classification |
|---|---|---|
| Supply and installation of the medical device (medical gas installation) | 8% | medical device within the meaning of the MDR |
| General construction works: chases, wall openings, enclosures | 23% | construction works outside the boundary of the device |
The boundary is set by what is actually being supplied, not by the name of a line in the cost estimate. A medical gas installation as a whole is a medical device, but not every activity performed alongside it shares its tax treatment.
The tax classification of an installation therefore starts with an honest breakdown of the scope: what is the device and its assembly, and what is construction work. The logic of this split is set out in the guide „Medical gases in practice. Volume 1" (GMWP) developed by INMED S.A.
When does a comprehensive supply apply?
A composite supply is a situation in which splitting the elements would be artificial, because they form a single economic whole — the rate is then determined by the principal supply. The problem is that comprehensiveness is sometimes used as a catch-all, in order to apply the 8% rate to everything included in the contract.
What are the consequences of misclassifying the rate?
An incorrect rate hits both parties at once, and never at the moment the contract is signed. The most common consequences:
- bids cease to be comparable — a difference of 15 percentage points can decide the tender with no connection to the quality of the installation;
- understated VAT on the contractor's side means tax arrears and interest;
- overstated VAT on the hospital's side is a cost that no one will recover;
- the settlement of a grant or a loan goes off track when gross amounts change after acceptance.
What to agree before signing the contract?
The split of scope and rates must be on paper before anyone starts breaking open the walls. A cost estimate in which VAT medical gases is a single line item at the 8% rate for the whole thing, that is not a saving — it is a deferred dispute. GMWP shows the criteria for splitting the scope and which of its elements require separate treatment.
Frequently asked questions
Does the 8% rate cover the entire medical gas installation?
No. The 8% medical device rate covers the supply of the device together with everything inseparably linked to it. General construction work carried out on the same occasion remains construction work at 23%.
Who bears the risk of an incorrect rate?
Formally the issuer of the invoice, i.e. the contractor. In practice also the investor — through corrections, disputes over remuneration and the settlement of financing.
Does a contract clause determine the rate?
No. The actual nature of the service is decisive. A contract may describe it, but will not change it.
Basis
- Regulation (EU) 2017/745 (MDR) — the boundary of the medical device, on which the tax classification depends
- Act of 11 March 2004 on the tax on goods and services — reduced rate for medical devices (Annex 3), standard rate for construction works
- Medical Gases in Practice, Booklet 1, 2026 ed., INMED S.A. — splitting the scope into supply of the device and general construction works
Detailed criteria for the split, examples of scope breakdown and the pitfalls of drafting a cost estimate are described in the source — order the GMWP guide and check the split before you sign the next contract.
See also: medical gas installation projects in hospitals, audits of medical gas installations.
Prepared by: the technical team of Małgorzata Dopierała, Damian Czyczyro and Przemysław Kostera — Medpipe Sp. z o.o., design, audits and inspections of medical gas installations. This article is based on the guide „Gazy medyczne w praktyce. Zeszyt 1” (Medical Gases in Practice, GMWP), INMED S.A.