Guide: The Right to VAT Refund

ByMateusz
  1. When Can You Get a VAT Refund?
  2. When Can’t You Get a VAT Refund?
  3. Other Documents Recognized as Invoices
  4. Can I Deduct VAT on Purchasing, Renting, or Leasing a Car, Fuel, and Car Service?
  5. Can I Deduct VAT on Housing Costs?
  6. Examples of Purchases Eligible for VAT Refund
  1. When Can You Get a VAT Refund?

The provision from the VAT Act regarding the right to deduct tax is short and very general. VAT charged can be deducted to the extent that goods and services are used to perform taxable activities. The expense serving as the basis for the deduction must be properly documented, usually with a VAT invoice. So, you must justify why the service or good is used in your business.

  1. When Can’t You Get a VAT Refund?

The regulations also describe circumstances where the right to deduct VAT is not granted or is limited. These are mainly purchases of:

overnight services (hotels), catering services (eating at restaurants),

when there is no VAT on the invoice,

when there is VAT, but from a country other than Poland,

representation expenses, e.g., private plane flights, boat rentals,

expenses on clothing and health issues, e.g., buying glasses.

  1. Other Documents Recognized as Invoices.

To deduct VAT, you should have an Invoice issued by the seller along with your details. Data for the invoice is provided before making the purchase. If your details are not on the Invoice, you cannot deduct VAT. There are mainly two exceptions to this rule when:

the price is up to 450 PLN. Then a receipt from the cash register with your VAT number is enough.

A one-time ticket for paid highway, train travel. Then no personal details are needed.

  1. Can I Deduct VAT on Purchasing, Renting, Leasing a Car, Fuel, and Car Service?

As cars are used both privately and for business activities, the legislator allows a 50% deduction for purchasing, renting, leasing a car, and all expenses related to the car, such as fuel purchase, service, and part replacement.

  1. Can I Deduct VAT on Housing Costs?

This has been discussed in a separate post https://podatki-w-it.pl/vat-deduction-guide-for-home-office-how-to-optimize-living-and-working-expenses/

  1. Examples of Purchases Eligible for VAT Refund

Each purchase must be individually analyzed to determine if it is necessary in connection with business activities. Below are examples of standard expenses:

Equipment and services for the direct provision of IT services: computer, phone, smartwatch, headphones, XBox, PlayStation, pendrive, powerbank, internet purchase; laptop backpack, document bag, notebooks, notepads, A4 paper, pens, pencils.

Home workspace for Home Office: desk, chair, laptop stand, document cabinet, flowers, pots, air conditioner, air purifier.

Means of transportation to the office/for business matters: car, bicycle, electric scooter, train tickets, paid highway ticket.

For meetings with clients, expenses on standard hospitality:

coffee, tea, sugar, lemon, water, sweets.

Remember, each situation requires an individual assessment and proper documentation to avoid problems during a possible tax inspection.