The European Union court issued a landmark ruling on Polish VAT deduction rules, which can significantly improve the financial situation of companies (especially small companies) operating in Poland. Thanks to this decision, entrepreneurs will not have to credit the state budget.
What did the court decide?
The EU Court considered that the provisions in force in Poland which make the right to deduct taxes conditional on receipt of the invoice (Article 86(10b)(1) VAT laws), are incompatible with the EU VAT Directive.
Under the Directive 2006/112, the right to deduct arises when material conditions – i.e. when goods or services have been acquired – are fulfilled regardless of the formal moment of receipt of the invoice. An invoice is needed only to achieve this right, but it should not decide its origin. Meanwhile, the Polish established practice made the moment of acquisition of the right to deduct from the moment of receipt of the invoice dependent on the seller.
Why is this important to companies?
- Allows early VAT deduction – which can improve the financial liquidity of companies.
- It reduces situations in which companies “credit the state budget” with their resources for several weeks.
- It points out the need to adapt Polish law to EU principles of neutrality and proportionality of VAT.
Meaning in e-invoice practice (KSeF)
The new mandatory National e-Faktur System (KSeF) can still facilitate the process – both the parties to the transaction and the fiscal system have full insight into the invoice in real time, which eliminates doubts about the moment they were received.
Reference and date of judgment:
The sentence has fallen. 11 February 2026 on T-689/24.
This ruling is recognised as the first such significant tax ruling for the benefit of taxpayers in Polish practice before the EU Court after the reform of the EU judicial system.