EU VAT case law

You can deduct VAT in the tax return for the 1st month - even if you received the invoice in the 2nd month.

Judgment of the General Court, 11.02.2026, T-689/24, Director.

Background

• A Polish company purchased gas and electricity.
• It purchased these goods in month 1.
• It received invoices for these purchases in month 2, but before submitting its tax return for month 1.
• The company claimed that it was entitled to deduct VAT already in the VAT settlement for the month 1.

Resolution of the Court

The company may deduct VAT in the period in which it purchased the goods, even if it received the invoice in the following period, but before submitting the return for the period of purchase.

Reasoning of the Court

• Article 167 of the VAT Directive: the right to deduct arises at the time when VAT becomes chargeable. Article 63: VAT is chargeable when the goods are delivered (26).
• The right to deduct is subject to the fulfillment of material and formal conditions (27).
• The substantive conditions concern fundamental issues: such as the acquisition of goods as a taxable person and the use of those purchases for taxable activities (28).
• The formal conditions concern the exercise and monitoring of that right. They include obligations relating to accounts, invoicing, and returns (29).
• Only the EXERCISE of the right to deduct depends on the possession of an invoice (Article 178(a) (29).
• But the right itself depends solely on substantive conditions. It arises independently of the possession of an invoice (31-32).
• Meanwhile, according to Polish regulations, the right to deduct arises on condition that an invoice is held (33).
• The right to deduct should be exercised in principle during the same period in which it has arisen. This conclusion is not undermined by the judgment in Terra Baubedarf-Handel (C-152/02) (35-36).