Can VAT be deducted for the construction of a building partially used for residential purposes by the taxpayer?

• When a building is partially used for residential purposes by a taxpayer, VAT can be deducted in proportion to the usage for business activities.
• There are three scenarios: a building originally intended for business activities only, a building originally intended for both business and personal use, and a change in the original purpose of the building.
• Special rules apply for expenses related to the acquisition of property used for both business and personal purposes, where assigning the expenses entirely to business activities is not possible.
• The amount of VAT deduction is calculated based on the percentage of the property’s usage for business activities.
• If a building is solely intended for business activities, the taxpayer can deduct the full amount of VAT.
• If some sales within the business are exempt from VAT, the deduction is calculated based on the proportion of taxable transactions to the total turnover.
• Any change in the property’s purpose during the correction period requires an adjustment of the deducted VAT.

Source: ksiegowosc.infor.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.

---

---