How should the municipality settle VAT for providing water infrastructure to a municipal company?

• The municipality (VAT taxpayer) is responsible for tasks related to sewage, waste management, and sanitation facilities.
• The municipality owns the water and sewage infrastructure and has incurred expenses for its creation.
• On October 1, 2023, the municipality provided the infrastructure to a municipal company free of charge.
• The company will use the infrastructure to provide paid sewage services within the municipality.
• The company will record and account for the services provided through the infrastructure in its sales registers and pay the applicable VAT.
• The company will also provide water and sewage services directly to residents based on a loan agreement with the municipality.
• The municipality will not charge any fees to the company for the use of the infrastructure.
• The municipality will account for VAT on a monthly basis.
• The question is how the municipality should account for the VAT for the free provision of the water infrastructure to the municipal company in October 2023.

Source: podatki.gazetaprawna.pl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---