VAT Deduction for Sewage Services Provided to External Recipients – Correct Position

• The document is a letter from the Director of the National Tax Information of Poland, dated October 3, 2023.
• The letter confirms the correctness of the recipient’s position on the tax implications of a future event in the tax on goods and services.
• The individual interpretation request received on August 2, 2023, concerns the taxation of paid sewage disposal services provided to external recipients.
• It also concerns the right to full deduction of VAT calculated from investment expenditures related to property that will be used exclusively for providing paid sewage disposal services to external recipients.
• The municipality is a registered, active taxpayer of the tax on goods and services.
• The municipality, through its budgetary unit, provides sewage disposal services to residents, entrepreneurs, and institutions in the municipality area, as well as for its own organizational units.
• The municipality is implementing sewerage investments that are used for the needs of external recipients and are not simultaneously used for the disposal of sewage from internal recipients.
• The municipality plans to implement an investment project in 2023-2024, which will be financed both from the municipality’s own funds and from external funds.
• The municipality emphasizes that the property that will be created as part of the investment will be the property of the municipality.
• The property will be used exclusively for providing paid sewage disposal services to external recipients and will not be used in any way for the disposal of sewage from internal recipients.
• The investment expenditures will be documented each time by VAT invoices issued by suppliers to the municipality.
• The individual interpretation request concerns only tax issues related to investment expenditures associated with property that will not be used in connection with the provision of services to internal recipients.

Source: sip.lex.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.