- The Supreme Administrative Court ruled that activities performed by special purpose vehicles established by local government units, which are financed solely by public funds and do not aim to make a profit, do not qualify as economic activity and are therefore not subject to VAT.
- This ruling clarifies that if a company’s sole purpose is to execute public tasks without engaging in market competition, it does not need to be analyzed further for VAT exemption criteria under Article 15(6) of the VAT Act.
- Experts view this decision as significant for municipal companies, providing clarity on VAT obligations and emphasizing that the classification of taxpayer status depends on whether an activity is deemed economic in nature, rather than merely the legal form of the entity.
Source Prawo
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