Water and Sewage Services: VAT Taxation, Deduction, and Proportional Calculation for Municipalities

Providing water supply and sewage disposal services is a taxable economic activity subject to VAT
Utilizing infrastructure for water supply and sewage disposal for internal recipients is not subject to VAT
Municipalities have the right to deduct part of the VAT from invoices related to water supply and sewage infrastructure investments
The deduction key should be calculated based on the proportion of water supplied to external recipients in the total water supplied
Municipalities can use a more representative method for calculating proportions based on the water supplied/sewage disposed to external recipients in the total amount
This method best reflects the municipality’s activities and purchases made.

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.