Right to deduct VAT on accommodation services
In a recent ruling, the WSA in Wrocław, ruled positively on the possibility to deduct VAT on accommodation services purchased and not resold.
The court indicated that a taxpayer will be entitled to deduct VAT on the purchase of accommodation services provided by external suppliers also in the event that, for reasons beyond its control, the final resale of these services does not take place. The above position is in line with the view of the CJEU, which has already ruled that a genuine intention to use the acquired goods or services for VAT-taxable activities is sufficient for VAT deduction, and also reflects the wording of the VAT Act’s provision on the possibility to deduct VAT on accommodation services purchased for resale, rather than services purchased and resold.
– This judgment should be viewed very positively, as it may change the optics on the right to deduct VAT in the case in question, not only for the taxpayers themselves, but also for the tax authorities. As a rule, taxpayers who do not transfer the value of purchased accommodation services to their clients do not deduct VAT on their purchase for security reasons, due to fear that the tax authorities will question the possibility of including expenses on purchased and not resold services in VAT settlements, comments Łukasz Woźniak, manager at Thedy & Partners.