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On 3 April this year, the Court of Justice of the European Union ruled that a property sale by a married couple in circumstances indicating business activity should be subject to VAT. According to the CJEU, the taxpayer should be the married couple under community property, not each spouse separately. This important, groundbreaking ruling has already been followed by a Polish court.
The CJEU judgment identified a gap in Polish regulations
In its judgment of 3 April 2025, case C-213/24, the CJEU identified a clear gap in the Polish VAT Act concerning property sales by spouses.
It ruled that where a property sale has the characteristics of business activity, the married couple under statutory community property should be treated as the VAT taxpayer, not each spouse separately.
The CJEU highlighted the specific community-property regime and the economic risk borne jointly rather than individually in the sale.
If the spouses appear to third parties as jointly selling property in a transaction displaying business characteristics and jointly bear its risks, the Luxembourg Court considers that they may act as a single VAT taxpayer.
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The Wrocław court followed the CJEU: spouses as a single VAT taxpayer
Soon afterwards, the Provincial Administrative Court in Wrocław took a similar approach. In judgments of 5 August this year, cases I SA/Wr 92/23 and I SA/Wr 99/23, it ruled that a married couple under community property should be treated as one VAT taxpayer, similarly to a civil partnership. The court considers such a couple one economic entity, jointly bearing risks and making key decisions.
The facts resembled the CJEU case. Spouses under community property sold real estate after comprehensive investment preparation, including organising the properties, installing technical infrastructure and marketing activities. They engaged a professional representative to complete the transaction.
In light of previous authority practice and case law, classifying these actions as business activity is not particularly doubtful.
The Wrocław judgments are groundbreaking because Polish tax offices previously required each spouse to register separately for VAT in most similar cases.
Following the CJEU judgment, the Wrocław court expressly stated that the couple should be one VAT taxpayer, adding that dividing community property solely for VAT purposes is impermissible.
Practical problems with treating spouses as one VAT taxpayer – the VAT Act
These judgments nevertheless create practical problems. The Polish VAT Act currently appears not to account for the possibility indicated by the CJEU and Wrocław court. Spouses cannot, among other things, obtain one joint NIP number, so correctly issuing a single joint invoice may be problematic.
This also raises important doubts for purchasers and their right to deduct VAT. Questions arise about previously initiated proceedings and spouses already registered as separate VAT taxpayers.
We are therefore at a point where amending the VAT Act, or at least a statement from the Ministry of Finance, seems essential.
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