- The Supreme Administrative Court ruled on April 17, 2025, regarding full VAT deduction for banks on services purchased from third parties and re-invoiced to clients.
- mBank, a VAT taxpayer, primarily offers VAT-exempt services but also purchases external services like legal advice and valuations, passing these costs to clients without a markup.
- The bank sought confirmation on its obligation to issue VAT invoices to clients and its right to fully deduct VAT from supplier invoices.
- The tax authority and the Warsaw Administrative Court initially ruled that only partial VAT deduction was allowed, as the services also benefited the bank.
- The Supreme Administrative Court overturned this decision, supporting the bank’s full VAT deduction claim.
- The court emphasized that external services are directly linked to specific client transactions and are essential for their execution.
- The ruling is significant for financial institutions dealing with mixed VAT situations, highlighting the importance of clearly associating expenses with taxable activities.
Source: mddp.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.
