The commune as an investor, pursuant to Art. 86 section 1 of the Act of March 11, 2004 on tax on goods and services (Journal of Laws of 2022, item 931, as amended), there is no right to deduct input tax on goods and services resulting from invoices documenting the purchase goods and services related to the implementation of the task. Pursuant to Art. 86 section 1 above Act, the taxpayer has the right to reduce the amount of tax due by the input tax included in the invoices, only to the extent that these goods and services are used for activities subject to VAT. Pursuant to the provisions cited above, the right to reduce the amount of tax due by the amount of input tax is granted when certain conditions are met, i.e. the deduction is made by a registered, active taxpayer of goods and services tax and when the goods and services on the purchase of which the tax was paid accrued, are used to perform taxable activities. The condition enabling the taxpayer to exercise the right to deduct input tax is the connection between purchases and taxable activities. The principle presented above therefore excludes the possibility of reducing the amount of tax due by the amount of input tax related to services and goods that are not used for taxable activities at all, i.e. in the case of their use for activities exempt from VAT and not subject to this tax. The project is carried out as part of the Commune’s own tasks on the basis of:art. 7 of the Act on municipal self-government. Services will not be provided using the infrastructure created as part of the project. Due to the above, the Commune (…) cannot recover the VAT paid.
Source: sip.lex.pl
