The Supreme Administrative Court rules on whether temporary work agencies can deduct full VAT for examinations, transport and accommodation services.
Supreme Court Ruling on VAT Deduction
The Supreme Administrative Court addressed the question of whether a temporary work agency can deduct the entire VAT incurred for its services.
Agency’s Scope of Services
The agency in question not only searches for employees, signs contracts with them, and directs them to work for clients but also provides additional services.
These include equipping employees with clothing and protective equipment, conducting medical examinations, organizing accommodation, and arranging transport to the workplace.
VAT Deduction Claim
The agency argued that all these services were integral to its business activities and therefore eligible for full VAT deduction.
This applied even when certain services were provided free of charge or were exempt from VAT, such as medical examinations.
Agency’s Justification
The agency maintained these services had an auxiliary character, supporting its core, VAT-taxable activities rather than being ends in themselves.
It explained that without providing these additional services, it would be unable to fulfill its contractual obligations to clients.
