Ruling: No right to deduct VAT for city when it purchases IT equipment and software

Under Article 86, Section 1 of the VAT Act, taxpayers can reduce tax owed by the input tax amount if they use goods and services for taxable activities, subject to specific conditions. Article 86, Section 2 outlines that input tax is the sum from invoices for purchased goods and services. However, Article 88, Section 4 limits this reduction for non-registered VAT taxpayers, except in certain cases. The right to deduct input tax applies to registered active taxpayers engaged in business activities. Local government units engaging in non-commercial, public infrastructure projects don’t qualify for this deduction.

Source: sip.lex.pl

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