An important voice of the Supreme Administrative Court in the context of unpaid benefits – Article 8(2)(2) of the VAT Act will not apply to benefits provided free of charge to employees and their families. Importantly, there is no taxation only if the services provided free of charge were acquired for private purposes of employees and their families, and not in connection with the company’s business activity. In that case, the company is not entitled to deduct input tax, because in this respect it does not act as a taxable person for VAT purposes and, consequently, it is not obliged to charge the tax due on the services provided.
- Where did it start?
- The head of the National Information Service was of a different opinion
- The PAC opted for a historical interpretation of the provision
- What is important is the nature in which the Company acts in providing free services
- What does this mean for taxpayers?
Source: MDDP
