Possibility of deducting VAT for catering services for an accommodation service provider

Possibility of deducting VAT for catering services for an accommodation service provider (judgment of the Supreme Administrative Court of June 26, 2023, I FSK 603/19)

• A company specializing in short-term apartment rentals asked for an interpretation to confirm its right to deduct VAT from invoices for catering services provided by an external contractor.
• The KIS director denied the company’s request, stating that the VAT Act and Directive do not allow for it.
• However, the Supreme Administrative Court ruled in favor of the company, stating that the concept of “tourist services” should be interpreted broadly and that previous case law supports a broad interpretation.
• This judgment is positive for taxpayers in the tourism industry, as they now have the opportunity to deduct VAT from catering service invoices.

Source Deloitte

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