Renting to municipalities without VAT
Since 10 May, a regulation of the Minister of Finance has been in force, thanks to which rental, lease of residential real estate, on its own account, to local government units (JST), their organisational units and one-person companies belonging to JST are exempt from VAT.
So far, only letting of residential real estate for residential purposes to final tenants and to social rental agencies has been exempt from VAT. Other entities accepting property for lease, including TSUs, could not benefit from such exemption. In addition, local government units could not deduct the VAT included in the price of leased properties, due to the fact that their further lease to residents benefited from the VAT exemption.