VAT Deduction Retroactivity at Risk After Advocate General’s Opinion

• The EU General Court’s ruling in Case T-689/24 allowed VAT deduction in the period when the right arose, even if the invoice was received later, as long as it was held by the filing deadline for the annual VAT return.
• Advocate General Juliane Kokott, in Case C-167/26 RX, argues this departs from settled EU case law, especially Terra Baubedarf-Handel (C-152/02), where deduction was tied to the period in which both the taxable supply and possession of the invoice coincided.
• The AG says the Court mischaracterized the facts of C-152/02 and incorrectly distinguished it, creating an unintended shift in EU VAT law.
• In the AG’s view, while formal VAT requirements may be treated flexibly, possession of an invoice remains a fundamental condition; if the invoice is received in a later period, the input VAT deduction must be claimed in that later period.
• The opinion supports overturning the General Court’s approach as inconsistent with the coherence of EU VAT rules.

Source: eutekne.info

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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