Deducting 23% VAT from rental of apartments for employees

• The NSA has ruled that expenses on renting residential premises for employees should be eligible for VAT deduction
• Employers often receive invoices with 23% VAT for renting residential premises for their employees
• Companies may face a dilemma whether to deduct VAT from such invoices or not
• A company in Poland entered into a short-term delegation agreement with a Swiss company to provide specialized employees
• The Polish company rents apartments/houses for employees and provides them for free during work
• The company questioned whether it should charge VAT for providing properties to employees for free and if it can deduct VAT for renting residential premises for employees
• The tax authority agreed that renting for employees should not be taxed, but expenses related to renting may be indirectly linked to taxable activities
• The tax authority stated that indirect impact of expenses on taxable activities does not matter if they can be directly assigned to non-taxable activities.

Source: crido.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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