NSA tempers the tax authorities' ambitions regarding subsidies

The municipality does not pay VAT on the municipal subsidy for the construction of the gas network, received in exchange for consent to the creation of a landfill - according to the NSA ruling.
The dispute in this case was brought by the municipality of Lubartów, which is carrying out an investment consisting of the construction of a gas pipeline network as part of its own tasks. It will be used by households.
The municipality announced that the investment would be used for taxable activities from the very beginning. Initially, it was to be leased and then resold to Polska Spółka Gazownictwa - all at market prices.
The municipality was to receive a specific subsidy from the city for the implementation of this investment. In the agreement between the local governments, it was agreed that 80% of the investment expenses would be covered by the city, and in return, the municipality would provide the city with other land for a landfill and would agree to the construction of another basin on the landfill. The municipality wanted to make sure that the subsidy it received would be VAT-free.

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