Poland – C-895/19 – neutrality and proportionality principles


On March 18th, the Court of Justice of the European Union issued a judgment concerning the compliance with the VAT Directive of Polish regulations which, in certain situations, impose recognition of output and input VAT under ICA and importation of services in settlements for other periods, which in practice leads to ICA and importation of services losing their neutrality status for the taxpayer. Such settlement is connected with the necessity of paying irrecoverable penalty interest on tax arrears.

In the judgment C-895/19  the Court indicated that the Polish provisions of the VAT Act are not compliant with the VAT Directive.

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