The issue considered in the following article refers to the consequences regarding tax on goods and services in relation to the acquisition of subsidies by non-governmental organizations and private entities. Such institutions operate in accordance with the Act of 24 April 2003 on public benefit activity and voluntary work and are allowed to be granted subsidies for performing tasks ranging from social care to education, for which governmental and self-governmental institutions are also responsible. The situation in which these private entities – VAT payers – perform tasks in substitution for Municipality affects taxation on goods and services. The particular difficulty arises in connection with a manner of determination of a correct taxable base of VAT by the said entities for the social support services or educational activities performed by them, but funded by Municipality or the State Treasury (the Ministry for Education). Therefore, a question has arisen whether or not the subsidies granted to the private entities for the performance of tasks of social care and education, assigned by local self-governments, are subject to the regulations of the Act of 11 March 2004 on tax on goods and services, i.e. if the subsidies are to be included in the taxable base of value added tax.