In business, it is common practice for a firm to pass on the costs, it has incurred (on its own behalf) to another firm that makes use of a specific service in practice. This situation, commonly mentioned to as ‘re-invoicing’, can be applied in cases where the parties have another agreement relating to the sale of the primary service.
The tax authorities have a different stance taken by taxpayers where costs attributed to utilities, can and should be, passed on to the tenants in the method of re-invoicing, and that the VAT rate appropriate to a specific type of service (goods) should be applied. Administrative courts do not agree with this view in each case, however.
The main issue is the components that are in fact covered by the lease, i.e. determining whether supply of so-called ‘utilities’ (hot and cold running water, electricity, gas, the collection of liquid waste, these would be on the premises regardless of what the parties wanted, due to existing structure of the building or infrastructure), can be omitted from the lease arrangement for those premises.
The supply of utilities and the collection of waste can probably be omitted from a lease of the premises. Supplying these items should be paid for separately (exactly as other additional services, such as security or cleaning services). On the other hand, each and every time the premises or a building are leased, the service provided by the landlord should cover all of the payments to be settled in connection with the use of the premises, and this should include the cost of utilities.
The fee for leasing the premises should also include water, electricity, and gas, which are supplied via pipes, as the premises with incorporate these utilities.
Source: Wydawnictwo Wiedza i Praktyka Sp. z o.o. (August 2015)