The Legality of the Punitive Deferral of the Exercise of the Right of Deduction

In an attempt to address irregularities in VAT returns related to transactions in which, as a rule, the tax due is equal to the input tax (i.e. transactions subject to reverse charges and similar), the Polish VAT legislator has introduced a three-month mandatory period for submitting (adjusting) relative VAT returns. Failure to observe the term results in a deferral of the right to deduct input tax, which in turn leads to the accrual of default interests. A question is pending before the ECJ concerning the legality of this measure. In this article, the author argues that EU law does not preclude such a measure.