EU General Court: VAT deduction can be claimed if the invoice is available when filing the return

On 11 February 2026, the General Court of the European Union ruled in case T-689/24 which is relevant to the day-to-day practice of taxable persons registered for VAT. The decision addresses the question of whether the tax authority can force taxpayers to postpone their claim for a VAT deduction on taxable supplies received until the following month simply because the invoice arrived at the beginning of the following month. The Court’s answer is clear: if you have the invoice in your possession at the time of filing your VAT return, you may claim the VAT deduction.

Dispute over a “late” invoice

The case arose in Poland and concerned a taxpayer – a person registered for VAT in Poland who trades in gas and electricity. In practice, there were situations where the taxpayer purchased gas or electricity in one month (e.g. January) but did not receive the invoice from the supplier until the beginning of the following month (e.g. February). The key point, however, was that they received this invoice before they had to file their VAT return for the month of purchase (i.e. before the deadline for filing the January VAT return).

However, the Polish tax authority, relying on the national VAT Act, refused to recognize the VAT deduction claim for January on the grounds that the deduction could be claimed no earlier than in the taxable period in which the taxpayer physically received the invoice. According to the Polish tax authority’s interpretation, the taxpayer should have waited to claim the VAT deduction until filing the VAT return for the following tax period, i.e. February, even though the invoice was already available at the time the return for January was filed.

The taxpayer objected, arguing that such a procedure was contrary to EU law because it unreasonably postponed his claim for a VAT deduction and forced him to temporarily “lend” to the state, which undermined the neutrality of VAT.

The General Court’s decision – Neutrality takes precedence over formalism

The Court ruled in favour of the taxpayer and stated that the Polish legislation was contrary to the VAT Directive. In its reasoning, the Court emphasized several fundamental principles:

• Entitlement vs. exercise of entitlement

The court emphasized the difference between the arising of the right to deduct and the exercise of that right. The right to deduct arises at the moment the VAT becomes chargeable, typically upon the supply of goods or the provision of services. The right to deduct is a fundamental right of the taxpayer and is an essential element of the VAT mechanism. Holding an invoice is merely a formal condition for exercising that right, not a reason to change the moment when the right arises. Therefore, if the taxpayer has the invoice available at the time of filing the VAT return, the formal condition is met.

• Principle of tax neutrality

The Court also recalled the principle of tax neutrality. The purpose of the VAT mechanism is not to burden the economic activity of taxpayers with value added tax. Postponing the right to deduct to a later period, even though the conditions are met, places a disproportionate and temporary burden on the taxpayer.

• Distinction from older case law

The Polish tax authorities sought to defend their approach by referring to an earlier judgment of the Court of Justice (Terra Baubedarf-Handel). In that case, the court had previously ruled that a VAT deduction could not be claimed without an invoice. However, the General Court has now clearly explained the difference: in the earlier judgment, the taxpayer had not received the invoice by the time the VAT return was filed. In this case, however, the taxpayer physically had the invoice before filing the return.

The anti-fraud argument did not succeed

The Polish tax authority also argued that Article 273 of the VAT Directive allows Member States to introduce stricter measures to combat tax evasion. However, according to the Court, there is no risk of fraud if the taxpayer has a valid invoice at the time of filing the return and the tax authority is then able to verify the transaction.

Conclusion and implications for practice

The judgment ruled that Member States may not deny taxpayers the right to deduct VAT in the period in which the supply took place if they receive the invoice later, but still before the deadline for filing the VAT return for that period.

In the Czech tax environment, it will now be crucial how the Czech tax authority responds to this ruling of the EU General Court and whether it will necessitate an amendment to Section 73 of the Czech VAT Act. The Czech tax authority has not yet commented on the matter, so it is unclear whether it will accept the conclusions of EU case law without reservation or whether taxpayers will have to assert their rights through administrative or judicial proceedings in some cases.

The decision confirms that, under certain conditions, a taxpayer may rely on the direct effect of the VAT Directive, which prevails over national rules in the event of a conflict.

If you are dealing with a similar situation or are unsure about the correct procedure for VAT deduction, we will be happy to go through the specific circumstances with you and recommend a solution.