Supporting the construction of the third Ronald McDonald House in Poland
We advised the Ronald McDonald Foundation on obtaining a tax decision that will contribute significantly towards the construction of a new House for families of sick children at the Children’s Memorial Health Institute (IPCZD) in Warsaw.
As a public benefit organisation, the Foundation cannot deduct VAT, as it does not conduct any economic activity. Therefore, every zloty counts.
A tax thriller with a happy ending
At first glance, it may appear that investments with a social purpose are automatically entitled to a lower VAT rate. In practice, however, the process resembled a tax thriller. The tax authorities questioned whether the House, which provides temporary accommodation for families (though often for many months), met the definition of a permanent residential building.
The key challenge was to obtain confirmation that the construction in question could benefit from the preferential 8% VAT rate instead of the standard rate of 23%. This 15% difference in project costs would otherwise go to the state budget, but instead it will go directly to supporting families and equipping the facility.
Our services included:
- Providing legal and tax advice
- Representing the Foundation before the Director of the National Revenue Administration Information Centre (KIS) in the procedure for obtaining binding tax rate information
- Providing effective arguments to demonstrate that that the Foundation’s House serves social and residential functions, providing a necessary addition to the public healthcare system
Following thorough verification and our repeated supplementation of the arguments, the tax authority revised its previous position and confirmed the right to apply an 8% VAT rate.
In our work, some projects have much greater weight and significance than is apparent from documents and regulations. This was one of those moments: a case that gives a sense of moral victory. We have demonstrated that the Foundation’s Houses are not commercial properties, but an integral part of the process of treating children. Every zloty of VAT that we have managed to secure provides real support to parents who, when faced with their child’s illness, do not have to worry about having a roof over their heads, says Wojciech Śliż, who supervised the team’s work.
Result: the third Ronald McDonald House is gaining strength
Thanks to favourable tax decisions, the construction of the third Polish Ronald McDonald House now has even more secure financial backing.
The modern facility at the IPCZD in Warsaw will soon complement the existing Houses in Warsaw and Krakow, providing free accommodation for hundreds more families each year.
We are proud that we have been able to use our expertise in tax law to support the mission of ‘keeping families close’.
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