- Supreme Administrative Court Ruling: The Supreme Administrative Court ruled on September 22, 2025, that the activities of municipal companies performing solely public tasks do not constitute economic activity under VAT regulations and are therefore not subject to VAT.
- Criteria for VAT Exemption: The court emphasized that these companies operate without profit motives, do not bear economic risk as their costs are covered by local government budgets, and fulfill public interest tasks rather than competing in the market.
- Individual Assessment Required: While the ruling is beneficial for local governments, it does not resolve all VAT issues for municipal companies. Each company’s situation must be assessed individually, especially if they also engage in commercial activities, necessitating careful analysis of their financing and operational scope to ensure proper VAT compliance.
Source: mddp.pl
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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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