New Interpretation on VAT Deduction for Road Reconstruction Invoices

The text discusses a legal interpretation regarding the VAT tax deduction for invoices documenting road reconstruction
The interpretation confirms the correct tax treatment of the situation described
The request for the interpretation was related to a municipality’s inability to deduct VAT from invoices for road reconstruction
The municipality is a VAT taxpayer and carries out taxable activities, as well as non-taxable tasks related to road improvement
The municipality completed a road reconstruction project with the aim of improving road quality
The project included various construction works and the municipality applied for financial assistance for the project
Invoices for the project expenses were issued to the municipality, but the VAT deduction was denied due to the nature of the project’s activities.

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.