Many entrepreneurs, when starting their business, opt for a subjective VAT exemption, utilizing the annual turnover limit of PLN 200,000. This solution offers several advantages – fewer formalities and simpler accounting. However, over time, as the business grows, the obligation to switch to active VAT status increasingly arises.

And here arises a key question that we often hear:

• Is it possible to deduct VAT from fixed assets purchased while we were operating under the exemption?

The answer is: YES – under certain conditions. Pursuant to Art. 91 sec. 7 of the VAT Act, an entrepreneur has the possibility to adjust input tax if they acquired a fixed asset during the exemption period and subsequently opted out of this exemption and registered as an active VAT taxpayer. Of course, this must fall within the timeframe provided by the legislator for such an adjustment.

What does this mean in practice? The possibility of recovering part of the costs incurred for investments – and that means concrete money that can stay within the company!