Right to Deduct Input Tax: Timing, Invoice Receipt, and EU VAT Directive Compliance

• The case concerns whether a Polish company can deduct input tax on electricity and gas purchases if it receives the invoice after the purchase but before filing the tax return.
• The Polish tax authority and administrative court denied the deduction, citing national law requiring invoice possession at the time of deduction.
• The Polish Supreme Administrative Court disagreed, allowing deduction if the invoice is received before the tax return is filed for that period.
• The General Court agreed, emphasizing that under EU law, the right to deduct input tax arises when the taxable supply occurs, provided substantive requirements are met, even if some formal requirements are not.
• The court highlighted that restrictions on input tax deduction require special justification, and VAT neutrality and proportionality principles support deduction if substantive conditions are fulfilled.

Source: hub.kpmg.de

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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