VAT settlement by the municipality in connection with asbestos removal – confirmation of correctness

• The letter is addressed to the Director of the National Tax Information regarding VAT settlement by the municipality in relation to asbestos removal.
• The sender confirms that the recipient’s position on the tax consequences of the described future event in the VAT is correct.
• The interpretation request submitted on August 8, 2023, concerns the non-recognition of the subsidy amount as taxable VAT compensation and the lack of right to deduct VAT in relation to the task of removing asbestos-containing products.
• The municipality is a registered active taxpayer of VAT and has tasks related to environmental protection and disposal of municipal waste.
• The municipality is implementing or will implement a project for the removal of asbestos-containing products owned by individuals, churches, and housing communities.
• The project involves the dismantling of asbestos-containing products, preparation and transportation of waste, and disposal.
• The municipality acquires or will acquire services from a specialized company for the removal of such waste and receives VAT invoices from the contractor.
• The municipality has received a subsidy from the Regional Fund for Environmental Protection and Water Management for the project.
• The subsidy will cover the entire project cost, and both the municipality and the owners of the objects will not financially participate in the project.
• The questions raised in the letter are whether the subsidy received by the municipality will be considered taxable VAT compensation and whether the municipality will have the right to deduct VAT from invoices received from the contractor.

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.

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