In its recent ruling, the General Court of the Court of Justice of the European Union addressed the question of whether the payer can claim a deduction of VAT retroactively to the moment of the taxable transaction (date of taxable event), even if the payer receives the tax document only in the next tax period before filing the return. The General Court reached the conclusion that the right to deduct arises when the substantive law conditions are met, the actual possession of the invoice cannot be essential.

However, a review procedure was initiated against the aforementioned judgment on the initiative of the Advocate General, which currently is still conducted as ongoing. A review procedure can only be initiated in the event of a possible conflict of the judgment with EU law. Therefore, the General Court’s decision may still be changed.

The Financial Administration of the Czech Republic responded to this situation by publishing a statement, in which it confirmed that the decisive moment for practice in the Czech Republic remains the moment when the payer has the tax document at his/her disposal. If the invoice is delivered later, the deduction cannot be applied retroactively, but only in the period of its receipt.

We continue to monitor this issue for you and we will keep you informed of further developments in a timely manner.