Compensation for Demolition May Be Subject to VAT, Court Rules

Compensation for demolition may be subject to VAT, depending on the circumstances. The Supreme Administrative Court ruled that compensation for mandatory demolition due to road investments is taxable as it is considered payment for a service. A previous case in 2025 concluded differently, where a company did not have to pay VAT on compensation for partial demolition. The latest ruling serves as a warning that using terms defined in civil law, like “compensation,” does not determine VAT liability.

Source: podatki.gazetaprawna.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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