Lack of Right to Reduce VAT by Municipality for Street Lighting Construction

• The Director of the National Tax Information confirms that the position of the municipality regarding the assessment of tax consequences is correct.
• The municipality has applied for funding for a project to improve street lighting.
• The municipality is requesting the inclusion of VAT costs in the eligible costs for funding.
• The municipality will not be able to deduct VAT paid on the project as it is not for commercial purposes.
• The municipality is responsible for planning and financing public lighting.
• The right to deduct VAT depends on the use of goods and services for taxable activities.
• Public authorities are not considered taxpayers for VAT purposes unless they engage in commercial activities.
• The municipality is considered a public authority and therefore cannot deduct VAT on the project.
• The municipality’s project aims to improve the quality of life for residents and reduce environmental impact.

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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