Abandoned Investment and VAT: When Can You Keep the Deduction and When Must You Repay?

• Abandoning an investment does not automatically require the return of previously deducted VAT, as long as there was a genuine intention to use the expenses for taxable business activity at the time they were incurred.
• The right to deduct VAT is based on the taxpayer’s intention at the time of investment, not on the ultimate success or failure of the project.
• VAT authorities may require objective evidence of the intention to conduct taxable activity.
• VAT deduction may be lost or corrected only in cases of fraud, abuse, or if the purchased goods/services are ultimately used for non-taxable purposes or their connection to taxable activity is broken.
• If the investment is abandoned for reasons beyond the taxpayer’s control, the right to deduct VAT generally remains.

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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