Partial VAT Deduction Rights for Expenditures Related to Municipal Office Building Modernization

The text is about the right to partially deduct VAT from expenses related to the modernization of a municipal office building.
The letter confirms that the taxpayer’s position regarding the tax consequences of the described factual situation and future event in VAT is correct.
The request for an individual interpretation was submitted on October 9, 2023, and it concerns the right to deduct VAT from expenses related to the implementation of two investments.
The municipality is a registered active VAT taxpayer and performs tasks imposed on it by separate legal provisions.
The municipality can carry out both VAT taxable transactions and VAT-exempt transactions based on civil law contracts.
The municipality incurs various expenses for which suppliers issue VAT invoices.
The municipality is currently carrying out two investments: “Modernization” and “Digitization.”
The modernization includes work on the municipal office building where the municipality is located.

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.