Late invoice delivery is a common occurrence among businesses. Polish regulations, however, strictly base the timing of tax deductions on the date the document is physically received. The latest judgment of the General Court of the European Union of 11 February 2026 in Case T-689/24 defends taxpayers and sheds a new light on this issue.
The problem under Polish regulations
According to Polish regulations, specifically Article 86 paragraph 10b point 1 of the VAT Act, the right to reduce the amount of tax due by the amount of input tax arises no earlier than in the settlement for the period in which the taxpayer received the invoice or customs document.
In practice, this often meant a drain on business owners' pockets. For example, if a company (like the plaintiff in the case at hand) purchased gas or electricity in one settlement period but received an invoice in the following one, the tax authorities believed it had to wait until that subsequent period to deduct VAT. Polish law established an additional requirement for the right to deduct VAT: the invoice must be in possession on the settlement date.
The Fundamental Distinction: Material vs. Formal Premises
The European Union General Court, in its review of the Polish case, opposed this approach. It clearly divided the conditions into two categories that must be understood in order to properly exercise one's rights:
- Material conditions determine the right to deduct: The right to deduct arises when the tax becomes chargeable, i.e., when the goods are delivered or the services are performed. The creation of this right depends solely on the material conditions set out in the VAT Directive. Crucially, this right arises regardless of whether an invoice is held.
- Formal requirements determine the exercise of the right: Possession of a properly prepared invoice is merely a formal requirement. The exercise of the right to deduct is generally only possible when the taxpayer actually obtains possession of the invoice.
The triumph of the principle of neutrality
The Court recalled that the VAT system is designed to completely relieve taxpayers of the burden of VAT due or paid in connection with their entire economic activity. The principles of VAT neutrality and proportionality require that a deduction be granted if the substantive requirements are met, even if certain formal requirements are omitted.
If a taxpayer cannot deduct VAT for the period in which the transaction actually took place (and in which the right arose), and the relevant invoices were already available to them when they filed their VAT return for that period, they are temporarily liable for VAT. This constitutes a breach of the direct nature of the deduction and a violation of the EU principle of neutrality.
Ultimately, the Court ruled that the EU VAT Directive and the principles of neutrality and proportionality contradict Polish regulations, which state that a taxpayer cannot benefit from the deduction in a declaration for the period in which he met the material conditions, even though he received a late invoice before submitting that declaration.
What does this mean?
Having an invoice is a necessary condition for exercising the right to deduct VAT. However, it's important to remember that it doesn't determine the moment when this right arises . The ruling states that if a transaction took place in March and the invoice was delivered in early April—but before the 25th of the month (the submission of the JPK_V7 file for March)—the taxpayer has the right to safely include this document in their March tax return.
This article is for informational purposes only and does not constitute legal advice.
The law is current as of March 9, 2026.
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