Polish Supreme Court: Illegality Alone Doesn’t Bar VAT Deduction, Landmark 2017 Ruling Clarifies

• Poland’s Supreme Administrative Court ruled that the illegality of a business arrangement does not automatically remove the right to deduct VAT.
• The case involved alleged bid-rigging and phantom invoices in a government software procurement, with tax authorities denying VAT deductions.
• Lower courts sided with tax authorities, citing lack of genuine transactions and backdated documents.
• The Supreme Administrative Court reversed this, clarifying that illegal agreements do not necessarily mean no taxable transaction occurred; the right to deduct VAT can still apply if a real transaction took place.

Source: kancelaria-skarbiec.pl

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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