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SAC comments on VAT deduction on anti-radar and GPS logbooks

The Supreme Administrative Court upheld the tax administrator's opinion and disallowed the VAT deduction on the purchase of anti-radar equipment, as it was not used for economic activity and did not protect the taxpayer's property. The SAC also refused to accept a deduction for a GPS logbook, as the taxpayer had not submitted the logbook to the tax administrator on the grounds of personal data protection.

When purchasing anti-radar equipment, the taxpayer was assured by the vendor that the product was a standard tax-deductible expenditure for customers. This argument did not hold before the tax authorities. On the contrary, the tax authorities found that the device had been used to avoid liability for potential infringements of road traffic rules. The taxpayer and their employees are generally obliged to comply with road traffic rules. And if they do so, any anti-radar equipment is useless. Therefore, the tax authority did not recognise the entitlement to VAT deduction, and the Supreme Administrative Court upheld this approach.

The taxpayer did not submit their GPS logbook to the tax administrator, claiming the protection of their employees’ personal data. The tax administrator in response stated that it was possible to partly anonymise the data and submit only data pertaining to business trips.  The tax administrator also reiterated their confidentiality obligation. Because of the failure to submit the electronic logbook, the claim for deduction was rejected.

SAC’s opinion on the settlement of objections

In the judgment in question, we also draw attention to the SAC's comments on the settlement of the appeal objections. The SAC referred to its previous case law according to which merely repeating the appeal objections in the administrative action substantially reduces the plaintiff’s chances of success. According to the SAC, public authorities are not obliged to deal with every single objection raised by a party to the proceeding. As a rule, it is sufficient if at least the basic objections are settled. This means that it is also possible to respond to an objection by presenting a different, convincingly justified opinion in the statement of grounds of the decision, thus ensuring that the opinion is sufficiently supported.