Impact of vPPA on Input VAT Deduction and Court Ruling in Poland

The conclusion of a virtual Power Purchase Agreement (vPPA) in Poland, based on financial transactions like Contracts for Difference (CfD), can impact the deduction of input VAT due to their classification as VAT-exempt financial transactions. This raises questions about the right to fully deduct input VAT for vPPA clients. In a court case (I SA/Po 388/23), the court ruled in favor of MDDP’s client, stating that the taxable amount from vPPA transactions can be considered “incidental transactions,” allowing full deduction of input VAT. Additionally, input VAT from purchasing renewable energy certificates is fully deductible as a general economic activity cost.

Source: mddp.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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