- A father planned to lend residential units free of charge to his three adult sons, who would then rent them to third parties for residential purposes.
- The tax authority held that because the units had previously been used in taxable rental activity, they were not private assets; the father therefore acted as a VAT taxpayer when lending them.
- However, the authority also found no VAT had to be charged on the loan-for-use, because the father had not been entitled to deduct input VAT on acquisition or renovation/finishing costs, so the conditions for taxing non-remunerated use under Article 8(2)(1) of the VAT Act were not met.
- The taxpayer argued the transfer was purely free of charge and part of private asset management, so he should not be treated as a VAT taxpayer in respect of the lending.
- The Warsaw Provincial Administrative Court disagreed with the authority’s assessment.
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.
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