CJEU to consider the issue of overstated VAT on fiscal receipt

On 23 June 2022 Supreme Administrative Court (“SAC”) decided to ask Court of Justice of the European Union (“CJEU”) a preliminary question to establish whether VAT Directive regulations and the principles of neutrality, proportionality and equal treatment preclude the practice of the tax authorities which disallows correction of the taxable amount and VAT due at unchanged price as a result of that correction, where the sale of goods and services to consumers with an overstated VAT rate is confirmed by fiscal receipts and not by VAT invoices.

The practice of the tax authorities indicates that if the seller does not reimburse the buyer for the difference in the price corresponding to the amount of overstated VAT, it shall not be possible to correct unduly declared VAT. According to the tax authorities, such correction of VAT and, consequently, a VAT refund to the seller who has not borne the economic burden of VAT would lead to unjust enrichment.

Judgements of the Polish administrative courts in this matter are not uniform. There are positive verdicts of SAC for taxpayers, in which the Court indicated i.a. that provisions on tax overpayment do not provide for condition to proof economic burden. SAC also argued that accepting the arguments of the tax authorities would lead to conclusion that there would be no entity entitled for a refund of the VAT overpayment in such a case. On the other hand, the case law of SAC also presents a negative standpoint for taxpayers, in which the Court shares the position of the tax authorities by indicating i.a. that the issue of bearing the economic burden is important in relation to the tax overpayment. Therefore, the judgment of CJEU may allow for the unification of the verdicts of administrative courts and potentially it may change the approach of tax authorities in this respect.