Confirmation of Correctness of VAT Deduction for Municipality Expenditures on Investment Area Creation

The Director of the National Tax Information confirms that the position regarding the assessment of tax consequences in relation to the partial deduction of VAT on the municipality’s expenses for the creation of an investment area is correct.
The request for an individual interpretation was submitted on June 16, 2023, regarding the right to partially deduct VAT on expenses incurred in the implementation of the project “…” in accordance with Article 86(2a) of the VAT Act and the Minister of Finance’s regulation.
The request was supplemented with additional information on August 21, 2023, regarding the factual situation of the municipality’s project to create an investment area in D.
The project aimed to repurpose an industrial area and provide new economic functions for small and medium-sized enterprises.
The main challenges were the environmental degradation, lack of infrastructure, and necessary utilities in the area.
The project included land development, construction of necessary networks, and internal communication systems.

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.