Lack of right to deduct VAT by municipality for project related to its statutory activities

• The text is a response to a request for an individual interpretation of tax consequences.
• The request concerns the deduction of VAT related to a project.
• The municipality is required to centralize VAT settlements with its organizational units.
• The municipality plans to select a contractor through a price survey and sign a contract for the project.
• The estimated amount of funding to be applied for is 100% of eligible costs.
• The municipality will be responsible for accounting for the received funds and monitoring public aid.
• The project will be carried out in one stage and the municipality will not reclaim VAT.
• The expenses incurred for the project will not be subject to VAT.
• The project is related to the municipality’s statutory activities, specifically environmental protection.

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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