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The Polish VAT Act provides that the right to deduct input tax generally arises no earlier than receipt of an invoice. However, on 11 February 2026, the EU General Court delivered a judgment indicating that these provisions conflict with the EU VAT Directive and the principles of VAT neutrality and proportionality. Does the absence of an invoice therefore really always prevent VAT deduction?
What does the Polish VAT Act say about the right to deduct VAT? A transaction is not enough — the taxpayer must have an invoice
Article 86(10b)(1), read with Article 86(10) of the VAT Act, clearly states that the right to reduce output tax by input tax arises no earlier than in the settlement for the period in which the taxpayer received an invoice or customs document.
This is a very strict approach by the Polish legislator, assuming that the taxpayer can deduct VAT only after receiving an invoice, or possibly a customs document, serving as the basis for deduction. Thus, if an invoice for goods or services is received in the accounting period after the transaction, the right to deduct arises only in that later period.
This creates numerous practical problems in situations where an invoice is received in a different accounting period from the activity it covers. For this reason, it has long been widely argued that the Polish VAT Act’s rules in this area are unfair and, more importantly, incompatible with EU rules. Now, however, we have confirmation!
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Judgment T-689/24 of 11 February 2026 — substantive conditions are key, rather than formal ones
In judgment T-689/24 of 11 February 2026, the EU General Court, formerly the Court of First Instance, expressly stated that EU Directive 2006/112 on the common system of value added tax and the principles of VAT neutrality and proportionality preclude national rules under which “a taxpayer cannot exercise the right to deduct input tax in the return for the period in which the substantive conditions for exercising that right were met if the relevant invoice was not received during that period, even though it was received before that return was submitted”.
In this judgment, crucial for Polish taxpayers, the EU Court recalled that the VAT deduction system is intended to relieve taxpayers entirely of VAT payable or paid in the course of business. VAT therefore operates on the principle that it should burden only the final consumer, remaining neutral for entrepreneurs involved in production and distribution before the final taxation stage.
The Court expressly distinguished substantive conditions for VAT deduction from formal conditions. The former include acquisition of goods by a taxpayer, their later use for that taxpayer’s own taxable transactions, and prior supply by another taxpayer. Formal conditions include possessing the invoice on which the deduction is based.
Distinguishing these conditions, the Court stated that “input VAT deduction must be granted where substantive requirements are met, even if taxpayers have failed to comply with certain formal requirements”.
It then expressly emphasised the consequence: “The right to deduct therefore arises independently of possession of an invoice, which is merely a formal requirement for exercising that right”.
Practical implications of the VAT deduction judgment for Polish taxpayers
The judgment described above did not automatically amend the Polish VAT Act provisions quoted at the beginning.
However, given the principle of primacy of EU law, this ruling cannot be ignored...
The European Court clearly stated that the time of receipt of an invoice cannot automatically determine the earliest possible period for VAT deduction if the invoice was received before filing the return for the period in which the substantive conditions were met.
This opens the way for Polish taxpayers to reduce output tax by input tax in the month in which the tax liability arose, even if the invoice for the transaction was received only in the following month , before the deadline for submitting the relevant return.
For example, under this judgment, input VAT on June purchases can generally be included in the June return even if the related invoice reached the business only in July.
Nevertheless, remember that the relevant Polish provisions have not yet changed. Applying EU law contrary to Polish law, although possible, may cause certain problems in dealings with national tax authorities.
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Summary
Does no invoice always mean no right to deduct VAT?
The General Court’s judgment, formerly the Court of First Instance, of 11 February 2026 in case T-689/24 indicated that the Polish VAT Act provisions conflict with EU regulations and general principles where they prevent deduction of input tax in a return for a period in which the substantive conditions were met if the relevant invoice had not yet been received during that period.
This opens the way for Polish taxpayers to deduct VAT sooner, although it may be problematic in practice because the national regulations have not yet been amended in this respect.
Finally, on VAT deductions, we remind you of our article “Can a contract serve as the basis for VAT deduction?”, in which we cited recent judgments indicating that, in certain exceptional cases, a sufficiently detailed contract may also serve as the basis for VAT deduction instead of an invoice.
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