IPSS Braga demand total VAT return from PRR investments

Athe private institutions of social solidarity (IPSS) of Braga demand the return of the total VAT borne in the execution of investments financed by the Recovery and Resilience Plan (PRR), unlike the 50% returned by the Tax Authority.

In an open letter addressed to the various parliamentary groups with seats in the Assembly of the Republic, to which Lusa today had access, the District Union of the Private Institutions of Social Solidarity of Braga (UDIPSB) asks for help to convince the Tax Authority to review its interpretation of the law.

According to UDIPSSB, dozens of institutions across the country have been confronted with proposals to reject VAT refunds, “which could be burdened by tens or hundreds of thousands of euros, compromising their financial stability and the achievement of essential social responses to the people”.

“UDIPSSB does not, of course, question the need to prevent duplication of benefits or the supervisory powers of the Tax Authority. It questions, that is, an administrative interpretation which it considers to be legally incorrect and which may contradict the principle of legality and the necessary legal certainty”, reads in the open letter.

In this context, it calls on the parliamentary groups to promote “the clarifications and initiatives necessary for the review” of the Court Authority’s understanding that the sum of the benefits obtained under two legislations governing the matter must not exceed the 50% refund limit.

A decree-law of 2017 enshrines the right of the IPSS to the refund of 50% of the VAT borne on certain expenditure, in particular in the construction of buildings intended for the pursuit of its humanitarian purposes.

In turn, a decree-law of 2021, regulated by a ordinance of 2022, established a specific mechanism for financing VAT supported in projects covered by the Recovery and Resilience Plan (PRR).

“ The combination of these two mechanisms allowed the institutions to structure their investments, ensuring, in the legally foreseen situations, full recovery of VAT without duplication of any benefit,” UDIPSSB stresses.

This body sees that it does not want any undue benefit, but only that the legal arrangements for the financing and refund of VAT “are applied in accordance with the terms in which they were established, without restrictions resulting from administrative interpretations” which it considers “uncompliance with the law”.

“What is at stake is not just a tax divergence. It is the legal certainty of dozens of institutions and the sustainability of social investments made for the benefit of the most vulnerable populations”, he adds.