We are happy to announce another success of our VAT team. Our client, one of the largest manufacturers of construction materials in Poland, had a virtual power purchase agreement (VPPA, contract for a difference) including purchase of guarantees of origin for renewable energy. In 2021 we obtained a tax ruling for the client concerning selected VAT implications of that arrangement. Contrary to our position, the ruling authority denied the client the right to deduct VAT charged on purchase of such guarantees. The authority also held that when receiving funds pursuant to its VPPA the client acts as a taxable person exempt from VAT. Under the law in force at the time this could be troublesome, including due to right of deduction restrictions and the obligation to apply the so-called VAT proportion. We disagreed with the authority and challenged its ruling before the Provincial Administrative Court in Opole. The court decided on 21 February 2022 (case no. I SA/Op 483/21) to reverse the ruling in accordance with our argument. According to the court, purchase of guarantees of origin is related to taxable activities and as such confers the right of deduction. In addition, in certain circumstances, a business participating in a power CfD should not be treated as a taxable person for VAT purposes.