VAT Deduction Rights Denied for Road Reconstruction Project: Individual Interpretation

• The Director of the National Tax Information confirms that the taxpayer’s position regarding the VAT deduction from expenses related to a road reconstruction project is correct.
• The taxpayer, a local government unit, is carrying out a project funded by the European Union budget.
• The taxpayer is not entitled to deduct VAT from the project expenses because the project is not related to taxable sales.
• The taxpayer will not charge fees for the use of the facilities or generate any income from them.
• The construction of the roads aims to improve the safety of the municipality’s residents and all users of public roads in the municipality, rather than generate revenue.
• According to the tax law, public authorities are not considered taxpayers for tasks imposed by separate legal provisions, except for activities carried out under civil law contracts.
• The taxpayer, as a local government unit, is responsible for public tasks, including the maintenance and organization of local roads.
• Public roads are categorized based on their functions in the road network, and the taxpayer’s project falls under the category of public roads accessible to everyone.

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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