Gloss to the judgement of the Supreme Administrative Court composed of seven judges dated 28 October 2019, file reference I FSK 164/17 (infrastructure lease by the commune for the symbolic rent)

Abstract

The Commune applied to the tax authority for issuance of an individual interpretation concerning value added tax within the scope of the right to deduct, by way of adjustment, the tax charged in connection with the implemented investment – Construction of the mobile seasonal playing field [...]. The application states that the Commune is an active and registered taxable person for the purpose of value added tax. The subject infrastructure was ransferred for uncharged use in 2012. The investment has not been applied for taxable services due to its character. Currently, the Commune considers letting infrastructure for lease to the Municipal-Community Cultural Centre pursuant to the agreement. After transfer, the infrastructure would still be used as intended. The Commune views charging rent at the leaseholder in the amount of several hundred zloty per year. In addition, after transfer the infrastructure must perform its functions and remain public. The Commune has not deducted expenditure incurred on the infrastructure throughout its construction. All invoices documenting purchases have been issued for the Municipality and Communal Office, which is an active VAT payer. In relation to the above description, the following question is asked: “Shall the Commune obtain the right to deduct tax charged in connection with the above-mentioned investment in proportion to the remaining period of adjustment, pursuant to Article 90 et seq. of the Act on Value Added Tax of 11 March 2004?”.

Keywords

• community
• tax
• rent