Invoice errors and VAT deduction - the most important information


The fact that the buyer has an invoice issued by the vendor is only a formal condition for exercising the possibility of deduction. In order to deprive a taxpayer of the right to deduct VAT, the defects of the invoice must be serious enough to preclude the possibility of treating this document as an invoice.

The method of documenting the activities performed in terms of VAT has been formalized to a large extent. The formalism in this respect concerns both the information that must be included in each VAT invoice and the date on which it must be issued. It is not possible to derogate from the rules set out in the regulations.

From the point of view of VAT settlements of the seller and the buyer, the invoice is one of the most important documents. The obligation to document the turnover for the purposes of VAT with VAT invoices by taxpayers of this tax is specified in Art. 106b paragraph. 1 of the VAT Act. Pursuant to this provision, taxpayers are required to issue an invoice confirming the sale.

A correctly issued invoice entitles you to deduct the VAT contained therein. Sometimes there are errors in the invoices issued, as long as they are significant, they exclude the possibility of deducting VAT from invoices.

Below we present the most common errors that appear on invoices.

Error in the calculation of VAT

Even if the VAT shown on the invoice has been calculated incorrectly, this does not deprive the taxpayer of the right to deduct it. Such a position was confirmed by the Director of the Tax Chamber in Warsaw in the individual ruling of November 8, 2011, ref. No. IPPP1-443-1228 / 11-2 / BS, where we can read:

(...) The Applicant has the right to deduct VAT in the amount shown on the invoice by the invoice issuer, despite the fact that, in the Applicant's opinion, it is shown in an incorrect amount.

In particular, in these cases, the provisions of Art. 88 sec. 3a (4) (a) and (b) of the VAT Act.

In conclusion, despite the statement of the above-mentioned errors, the Applicant has the right to deduct the VAT shown on the invoices received. (...)

Also, the receipt of an invoice with an overstated VAT amount does not deprive the buyer of the right to deduct the entire amount of tax. This position is confirmed by the tax authorities, an example of which is the letter of the Director of the Tax Chamber in Poznań of January 18, 2016, file ref. ILPP1 / 4512-1-814 / 15-2 / MK, where we can read:

(...) The Company has identified cases in which the Suppliers applied to the VAT taxation of construction, renovation or assembly services within the block of buildings, provided to the Company, a 23% VAT rate (while, in the Company's opinion, a reduced VAT rate of 8% should apply to these services. VAT rate) and therefore issued VAT invoices for her, indicating the overstated tax amount.

(...) In such a situation, due to the presented description of the case and the legal provisions referred to above, it should be stated that the Applicant has the right to deduct the amount of input tax resulting from the invoices documenting the services provided to the Applicant and used to perform taxable activities. The use of an incorrect tax rate by the issuer of invoices does not deprive the Applicant of the right to deduct input tax, as this is not a negative premise that prevents the deduction of this tax, mentioned in art. 88 of the Act (...).

VAT if the activity is not subject to tax or is exempt

Pursuant to Art. 88 sec. 3a point 2 of the Act shall not constitute the basis for the reduction of the tax due and the refund of the tax difference or the return of the input tax, invoices and customs documents in the event that the transaction documented with an invoice is not subject to taxation or is tax-exempt.

Therefore, in a situation where the activity is not subject to tax or is exempt, and VAT has been charged on it, a deduction from such an invoice is not due.

Such a position was confirmed by the Director of the Tax Chamber in Warsaw in a letter of June 2, 2014, file ref. IPPP1 / 443-410 / 14-2 / ​​Igo, where we can read:

(...) the cash bonuses received by the counterparties are in no way related to the receipt of the mutual benefit by the Applicant, as such a benefit cannot be considered to be the purchase of a specific volume by the counterparties during the agreed settlement periods (months, quarters). Moreover, the failure of the buyer to meet a certain level of purchases is not subject to any sanction or any liability. Therefore, in the situation presented in the application, it should be considered that the recipient of the bonuses does not provide the Company with services within the meaning of Art. 8 sec. 1 of the VAT Act, so this activity is not subject to taxation and should not be documented with a VAT invoice.

As a consequence, if the contractors did not provide services to the Company, the invoices issued by them, pursuant to Art. 88 sec. 3a point 2 of the VAT Act, do not constitute a basis for the Applicant to reduce the amount of tax due by the amount of input tax shown therein (...).

Example 1.

The taxpayer rented an apartment for his employees for housing purposes. The landlord issued him an invoice with 23% VAT. Such an invoice is not entitled to deduct VAT, as the rental of premises for housing purposes is exempt.

Invoices that state fictitious activities

Joke. 88 sec. 3a point 4 of the VAT Act, it follows that the issued invoices or corrective invoices do not constitute the basis for deduction of input tax, which:

  • state activities that have not been performed - in the part concerning these activities,

  • provide incorrect amounts - in the part concerning those items for which the amounts are inconsistent with reality,

  • confirm the activities to which the provisions of art. 58 and 83 of the Civil Code - in the part concerning these activities.

Art. 58 of the Civil Code indicates that a legal act contrary to the act or aimed at circumventing the act is invalid, unless the relevant provision provides for a different effect, in particular that the invalid provisions of the legal act are replaced by the relevant provisions of the act. A legal act that is inconsistent with the principles of social coexistence is also invalid.

In turn, art. 83 of the Civil Code makes a declaration of will submitted to the other party invalid with its consent for appearances. If such a declaration was made to conceal another legal act, the validity of the declaration is assessed according to the properties of this act.