Preliminary Ruling Request: The Supreme Administrative Court (NSA) of Poland has submitted a preliminary ruling question to the Court of Justice of the European Union (CJEU) regarding the compatibility of Article 86(10b)(1) of the Polish VAT Act with Directive 112 and core principles of VAT such as neutrality, effectiveness, and proportionality.
- Key Legal Question: The NSA is seeking clarification on whether Articles 167, 168(a), and 178(a) of Directive 112, along with the VAT principles, preclude a national provision like Article 86(10b)(1) that restricts a taxpayer’s right to deduct input VAT if the invoice is received after the transaction period but before the VAT return is filed.
- Potential Impact: The outcome of this ruling could significantly affect the timing of VAT deductions, influencing both taxpayers and administrative practices in Poland.
NSA Judgement on Tax-Deductible Costs: On October 9, 2024, the NSA ruled (Case No. II FSK 45/22) that for an expense to be tax-deductible, it must have a direct connection to the taxpayer’s business activities. Expenses by a parent company for a subsidiary’s benefit cannot be recognized as the parent’s tax-deductible costs if the benefit is indirect.
- Tax Authorities Ruling on Restructuring: On October 7, 2024, the Head of the National Revenue Administration (KAS) refused a protective opinion for restructuring involving a Dutch cooperative and a limited liability company (B.V.), citing that the primary aim was to achieve a tax benefit, which conflicts with the Corporate Income Tax (CIT) Act, indicating an artificial arrangement to avoid taxation.
Source Tax Radar
