- The Supreme Administrative Court in Poland ruled that if a taxpayer provides free services to another entity that are indirectly related to VAT taxable activities, the taxpayer has the right to deduct input VAT.
- The case involved Pomorska Kolej Metropolitalna SA, a regional company that builds and provides railway infrastructure to transport companies in the Tricity area.
- The company argued that the free transfer of railway stops would increase passenger transport on its lines and generate VAT taxable revenue.
- The Director of the National Tax Information confirmed that the transfer of the stops would be VAT exempt, but the company would not be entitled to deduct input VAT.
- The Regional Administrative Court agreed with the Director, stating that there was no connection between the free transfer of the stops and the company’s taxable activities.
- The Supreme Administrative Court overturned the lower court’s decision, stating that the interpretation of the VAT law contained a logical error.
- The court ruled that the free transfer of the stops would not be subject to VAT and that the company could deduct input VAT.
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.
