Possibility to deduct VAT based on the contract

Judgment of the Provincial Administrative Court of December 8, 2023, ref. no. file III SA/Wa 1473/23.

In April 2021, a construction company bought residential and developed plots from sellers as part of their business activities. The sellers did not provide an invoice for the transaction, leading the company to inquire about the right to deduct input tax based on the sales contract. The National Tax Information Director found that the company was not entitled to the deduction. However, the Provincial Administrative Court ruled in favor of the construction company, emphasizing the presence of essential elements in the sales contract. This judgment has significance in VAT law as it potentially allows taxpayers to deduct input tax based on a contract without an invoice, as long as certain conditions are met. However, caution is advised, as tax authorities may take a restrictive stance on this issue.

Source MDDP

See also

• C-235/21 (RAIFFEISEN LEASING) – Judgment – A written contract may exceptionally be regarded as an invoice

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