Many entrepreneurs, when starting a business, opt for a VAT exemption, utilizing the annual turnover limit of PLN 200,000. This solution has its advantages – fewer formalities, simpler accounting. However, over time, as the business grows, the obligation to switch to active VAT 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 exempt?

The answer is: YES – under certain conditions. Pursuant to Article 91 sec. 7 of the VAT Act, an entrepreneur has the option to adjust input tax if they acquired a fixed asset during the exemption period and subsequently waived this exemption and registered as an active VAT payer. 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 these are concrete funds that can remain in the company!