- Supreme Administrative Court ruling favors cultural institutions: The court confirmed that cultural institutions can deduct VAT on expenses linked to taxable economic activities, even if some services are provided free of charge or as part of statutory tasks.
- Free services can support economic activity: Activities performed without direct payment can still be part of a taxable business activity if they promote or support income-generating operations, meaning VAT input can be fully deducted when properly allocated.
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Case-by-case analysis required: Authorities cannot automatically apply a pre-VAT coefficient to all expenses; they must assess which expenses are related to taxable activities and which are not, ensuring accurate VAT deduction rights.
Source Prawo
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