Thanks to the Supreme Administrative Court, municipalities can recover VAT on water and sewage investments

The Supreme Administrative Court has made a significant ruling regarding the deduction of VAT from expenditure on municipal water supply and sewage systems.
Currently, communes can only deduct VAT up to the amount of the VAT pre-factor, which is usually quite low.
However, a line of jurisprudence has allowed for the calculation of the pre-factor with a more favorable method. The recent ruling allows for a full deduction of VAT from such expenditure.
This is important for local governments carrying out tasks in this field and may result in more favorable VAT settlements in the future, as well as a reduction in administrative work for many communes.
The ruling is significant for those who disagree with the current interpretation and may consider adjusting previous settlements.