Abstract

Entities of municipal government entrust specialized commercial partnerships with industrial management. For pragmatic and tax reasons such partnerships could be accounted for by means of supplementary payments given to the capital by partners. Supplementary payments are given to partnerships based on resolutions of partners assembly, i.e. towns or boroughs which in most cases have 100% shares in partnerships. Such a form of accounting raises multiple controversies regarding goods and services tax, and also raises doubts in regard to corporate income tax. Controversies and doubts result from a non-uniform attitude of tax authorities and administrative courts towards municipal partnerships, which in fact implement public tasks, acting as a taxpayer of goods and services tax. In the authors’ opinion supplementary payments of towns and boroughs to municipal partnerships for implementing tasks connected with industrial management should not be subject to goods and services tax, because these partnerships do not act as VAT taxpayers in this regard. The attitude of tax authorities, however, seems to be different.