Return of expropriated land and compensation to municipality: What about VAT?

The return of expropriated land in exchange for a valued compensation is not considered a supply of goods, according to the Administrative Court in Wrocław
A municipality returned expropriated land to the legal successor of the previous owner
The municipality believed the return of the property would be VAT exempt, but the tax authority disagreed
The tax authority stated that the basis for taxation should be the compensation amount minus VAT
The tax authority considered the transaction as a taxable supply of goods, not a return of goods

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.