What VAT rate applies to a road maintenance contract

Road maintenance contracts are not always complex services and are not always taxed at the 23% rate.

A typical winter picture: a plow removing snow off the road. Usually at the request of the General Directorate for National Roads and Motorways (GDDKiA) or a local government. It may turn out, however, that two similar plows removing a layer of snow of similar thickness on two similar roads may be taxed differently: at 8 or 23% VAT.

COMMENTARY by Małgorzata Militz, VAT expert, in an article in Rzeczpospolita.

Road maintenance companies have had problems with charging VAT on such services for a couple of years.

– When contracts concluded with GDDKiA or local governments did not relate to the provision of the "keep the road standard" services, different VAT rates were applied to particular types of services. Tax and audit authorities were of a different opinion and classified these services as comprehensive ones, thus requiring 23% rate taxation – says the expert. She adds that in practice, these contracts and the nature of services were not analyzed. After all, this is a very diverse matter. In these circumstances, the published explanations are very valuable – comments Małgorzata Militz.

What VAT rate applies to a road maintenance contract – VAT – rp.pl