– Carrying out legal activities does not entitle local government units to deduct VAT charged on the purchase of goods and services. This right only comes from the implementation of activities subject to VAT. However, for the purpose of deduction, a certain level of intensity or significance of the taxable activity is required, or if the taxable activity is secondary and not the purpose of implementing a particular project – can it be assumed that the right to deduct is not available and VAT should be included in the total co-financing as eligible expenditure?
