Michał Piegdoń

Michał Piegdoń advises at Tax Legal Partner on VAT in the public sector and in culture: local government units and municipally owned companies, museums and other cultural institutions, foundations and associations. He works on VAT settlements in EU-funded projects, on the centralization of VAT (centralizacja VAT) in local authorities, on chain transactions and the due care standard, and on excise duty where it sits alongside VAT. He advises in Polish and in English.

In the public sector and in cultural institutions, a VAT error rarely ends in a discussion. It ends in a correction. In EU-funded projects it can also mean losing part of the funding. And usually it is one person who answers for it: the person who prepared the settlement. Very often that one person handles questions a larger organization would give to an entire department. If that is your situation, my role is to be the back-up your structure does not provide.

You are preparing an investment or an EU-funded project in a municipality and you do not know how much VAT you will actually recover. We calculate the recovery ratio and test how it will look once the project ends, so that a review years later does not take part of the funding away. You run a museum or another cultural institution? We go through tickets, sponsorship, publishing and grants, because VAT works differently in each of those streams, and that is where I most often find errors nobody knew about. In foundations and associations one question keeps returning: where statutory activity ends and economic activity begins. We draw that line and document it, so you have something to defend your deductions with. What you get at the end is a clear answer on whether the settlement is correct, and if it is not, a list of what to fix and in what order, with reasoning you can put in front of a supervisor, a supervising authority or a project auditor. You then file the return knowing how the position is supported and where the remaining risks lie.

If you are part of a chain transaction (transakcja łańcuchowa), two questions decide the outcome. Which supply in the chain carries the transport, and whether your checks on the counterparty meet the due care standard (należyta staranność). We answer both. Someone else’s fraud in the chain is paid for by whoever cannot show they were diligent. And where excise duty sits alongside VAT, we put the registration, records and returns in order before the authority asks about them.

I work in English as well as Polish, which matters for foreign foundations, cultural institutes and non-profit organizations operating in Poland. Those bodies meet the same question as their Polish counterparts, where statutory activity ends and economic activity begins, but they meet it without the local reflexes for how a Polish authority reads the answer. That gap is worth closing before the first settlement, not during a review of it.

Before I reach for a settlement template, I learn how your institution actually operates. A museum with one free-admission day a week accounts for VAT differently from a municipally owned company, and a foundation running economic activity alongside its statutory work is different again. In this sector a universal answer is rarely the correct one.

With chain transactions and invoicing, I go through the sales documentation step by step, and through the obligations that follow from it. You hear about a risk as it arises, while the treatment can still be changed, rather than at the end in a summary.

I check every contract against three taxes at once: VAT, corporate income tax and personal income tax. This matters most in joint venture agreements. A structure that is favorable in one tax can be expensive in another, and the effect only shows up in the annual settlement.

In each of these the point is the same. You get the information before signature or before filing, while the terms and the treatment can still be changed.

• Chain transaction, where you need to know which supply carries the transport and who can apply the zero rate
• Verification of invoices issued and received, and the due care standard in selecting counterparties
• VAT in a museum, cultural institution, foundation or association, where the risk should be assessed before an audit does it for you
• Joint venture agreement, and the treatment of contributions and profit sharing before it is signed
• VAT settlement in an EU-funded project that has to hold up during the project’s durability period as well
• Centralization of VAT in a local government unit or a municipally owned company, including the recovery ratio and corrections
• Excise duty: registration, records and returns wherever it appears alongside VAT

Settling VAT in a cultural institution, a local authority or a municipally owned company and want to check whether your position is defensible? A first conversation establishes which parts of the settlement need checking, which raise no doubt and where the remaining risks lie.

• VAT in the public sector and in culture
• Centralization of VAT in local government units
• VAT for foundations, associations and cultural institutions
• Input VAT recovery ratio and adjustments
• VAT in EU-funded projects
• Chain transactions and the allocation of the transport
• Invoice verification and the due care standard in VAT
• Tax analysis of contracts
• Excise duty

Cracow University of Economics, law

Polish, English