Possession of a confirmation of receiving correcting invoice (credit note) by the contractor is required to reduce the tax base resulting from the initial invoice

The Court of Justice of the European Union on January 26th 2012 (Case C-588/10, the Minister of Finance against Kraft Foods Poland SA) ruled that the requirement involving the dependency of reduction of the tax base resulting from the original invoice to the possession by the taxpayer the confirmation of  receiving correcting invoice (credit note) received by the purchaser of goods or services as referred to in art. 29 paragraph 4a VAT Act, is within the concept of the conditions referred to in art. 90 paragraph 1 of the Directive 2006/112/WE.

As can be seen from the sentence justification presented by the Court, possession of the confirmation receipt of correcting invoice by the supplier of goods or services as received by the purchaser of goods or services is suitable for this, to show that this purchaser has been informed of the fact that he should calculate the extent of his possible right to deduct VAT on the basis of the indicated correcting invoice. This requirement may substantially contribute to ensure the correct collection of VAT, fraud prevention, as well as eliminate the risk of tax revenue loss. As a result, Poland can rightly claim that requirement pursues the legitimate purposes established in the relevant EU law provisions.

In conclusion, Art. 29. paragraph 4a of VAT Act which came into effect on December 1st 2008, complies with the provisions of the EU law and its application by the tax authorities is absolutely correct.

Therefore taxpayers who relied on the content of the Directive 2006/112/EC, or some of the of administrative courts judgments (e.g. the Warsaw WSA verdict from December 11th 2009, act signature III SA/Wa 1255-1209, or the WSA sentence in Krakow on April 21st 2010, act signature I SA/Kr 173/10), questioning the compliance of national legislation with the provisions of Directive 2006/112/WE unfortunately must verify their current accounts. Indeed it should be expected that the tax authorities, relying particularly on the sentence of the Court will pay attention to the proceedings of taxpayers related to the correcting invoices and moment of submitted returns adjustments.