Administrative and legal activities related to construction projects are not a single composite supply for VAT purposes – important ruling of the Polish Supreme Administrative Court
The Polish Supreme Administrative Court confirmed that administrative and legal activities related to construction projects should be treated separately from construction works for VAT purposes. The judgment may significantly affect the construction and infrastructure sectors, especially projects involving real estate legal arrangements and administrative permits.
In its judgment of 19 May 2026 (case no. I FSK 1794/23), the Polish Supreme Administrative Court (NSA) addressed the VAT treatment of services performed in connection with infrastructure investments.
The case concerned a company carrying out the construction of high-voltage transmission lines. As part of the project, the company performed both construction works and a number of administrative and legal activities necessary to complete the investment, including:
- acquiring rights to real estate,
- obtaining administrative decisions and permits,
- negotiating transmission easements,
- determining compensation payments.
The taxpayer argued that all activities constituted a single composite supply, with construction works being the dominant element.
However, the NSA disagreed with this approach.
NSA position – separate VAT treatment of services
According to the Court, administrative and legal activities do not form a single composite supply together with construction works for VAT purposes. The assessment should be made from the perspective of an average customer, and combining these services into one supply would be artificial.
As a result, VAT consequences should be determined separately for each type of service.
Importance of the ruling for the construction and infrastructure sectors
The judgment may have significant practical implications for companies carrying out construction and infrastructure projects, especially where the investment process requires:
- extensive administrative activities,
- regulation of the legal status of real estate,
- establishment of easements,
- negotiations with landowners.
The ruling may affect both VAT settlement methods and the structuring of contracts and remuneration models in construction and infrastructure projects.
If you need support regarding VAT treatment of construction services or the analysis of composite supplies, feel free to contact the Thedy & Partners team.