2025-03-10
Can a contract be a VAT invoice?
Contract as an Invoice? A New Perspective on VAT Formalities Recent Polish rulings confirm the position of the CJEU regarding the recognition of contracts as documents equivalent to VAT invoices.
Contract as an Invoice? A New Perspective on VAT Formalities
Recent Polish rulings confirm the position of the CJEU regarding the recognition of contracts as documents equivalent to VAT invoices.
In Case C-235/21, the CJEU stated that a written contract may serve as an invoice even if it does not meet all the formal requirements set out in the VAT Directive. The key condition? The contract must include the VAT amount, the applicable VAT rate (either explicitly or implicitly), and other essential details typically found on an invoice, without which the tax authorities would be unable to establish whether the substantive conditions for the VAT-deduction were satisfied.
The administrative court in Warsaw adopted a similar position on Nov. 7th, 2024 (case III SA/Wa 1498/24, ruling non-final). It emphasized that the substantive conditions for VAT-deduction take precedence over formalities, such as the possession of a document titled “Invoice.” It applied the principle of “substance over form”.
What Does This Mean for Businesses?
These rulings reinforce the primacy of the actual transaction over strict formalities. However, since they were issued in highly specific factual circumstances, businesses are advised to approach VAT-deduction with caution. It is important to remember that, in other cases, the CJEU has stressed the necessity of complying with formal requirements—such as in the case of triangular transactions, where the lack of certain clauses on an invoice made it impossible to apply a simplification scheme.
See other articles
As the Polish National e-Invoicing System (KSeF) becomes more widely used, businesses are increasingly encountering a practical issue known as the “double document circulation.” This occurs when the structured invoice stored in KSeF (XML) differs from the PDF visualization sent to the customer, for example by email or through a customer portal.
On 11 February, the EU General Court (Case T-689/24) delivered an important judgment in a “Polish case” on the moment of input VAT deduction. The ruling may have far-reaching consequences for Polish businesses and the way VAT is settled in Poland.
Invoice Issued Outside KSeF and Tax-Deductible Costs. Key Position of the Polish tax administration.
Individual tax ruling of 9 January 2026, ref. 0111-KDIB1-3.4010.714.2025.2.JG In an individual tax ruling dated 9 January 2026, the Director of the Polish National Revenue Information (KIS) addressed an issue that has raised significant practical concerns in the context of the implementation of the National e-Invoicing System (KSeF). The key question was whether an expense documented by an invoice issued outside the KSeF-system may be treated as a tax-deductible cost for the purposes of Polish corporate income tax (CIT).
The introduction of the mandatory Polish e-invoicing system (Krajowy System e-Faktur – KSeF) as of 1 February 2026 will significantly change VAT invoicing rules, i.a. transactions involving foreign entities. One of the key factors determining whether mandatory KSeF applies is whether a foreign counterparty has a fixed establishment (FE) in Poland. If it is lacking on the seller’s side, then he may issue and send invoices outside KSeF (e.g. via e-mail, PDF). If the seller is subject to KSeF yet his buyer is not (lacking seat/FE in Poland), then the seller must issue the invoice via KSeF, yet simultaneously send it to his buyer in the old-fashioned way.
The general tax ruling issued by the Polish Minister of Finance and Economy on 27th of November 2025 addresses the issue of land, buildings and structures being deemed as “related to business activity”. It is one of the most significant documents in recent years in the area of property taxation. Its importance goes well beyond a purely technical explanation of statutory provisions. At its core, it touches on a fundamental and long-running dispute between taxpayers and tax authorities: where the line should be drawn between mere ownership of real estate and its use for business purposes.
Even though penalties for issuing invoices outside Poland’s National e-Invoicing System (KSeF) have been deferred until 1 January 2027, the real headache may come sooner.
The Court held that, in certain circumstances, contractual penalties for delays may qualify as tax-deductible in Polish CIT. The case concerned a property developer unable to hand over apartments to clients in time, due to delays caused by the general contractor. The clients charged contractual penalties, which the developer has paid and qualified as tax-deductible costs. The Polish tax authority (KIS) argued that any penalty for non-performance or improper performance is excluded from tax costs under Art. 16(1)(22) of the Polish CIT Act. The Polish Supreme Administrative Court (NSA) disagreed.
CJEU: Is a TP profit true-up a service? Key takeaways from 4 Sep 2025 (C-726/23, Arcomet) The Court held that intra-group payments determined under TNMM (e.g., skimming part of a subsidiary’s operating margin above a threshold) can be deemed as consideration for services and thus fall within VAT—if there is a legal relationship and a direct link between the supply and the consideration.
Is a plot of land with a building scheduled for demolition considered ‘undeveloped land’? Under the Polish VAT Act, the sale of undeveloped land is exempt from VAT as long as it does not have the status of ‘building land’. Otherwise, such sale might be subject to 23% VAT. In contrast, the VAT on a sale of a developed plot of land is determined based on the history of the buildings/structures. In general: older buildings = VAT-exemption. A recurring question, however, is how to classify land where there are buildings or structures in poor condition that are intended to be demolished. Can such a property still be treated as “developed” for VAT purposes? The question might seem irrelevant, yet there is another layer to it. According to Polish tax law, if the sale of immovable property (plot, building) is not subject to VAT at all or is VAT-exempt, the buyer must pay a 2% tax on civil law transactions (Podatek od czynnosci cywilnoprawnych, also known as PCC). Thus, many B2B-sales aim at having the transaction taxed with VAT (deductible) to avoid PCC (non-deductible).
KSeF 2.0 is here – the President of Poland has signed the bill! On August 27, 2025, the President approved amendments to the VAT Act introducing the new version of the National e-Invoicing System (KSeF). This marks one of the most significant tax reforms in recent years – transforming how every Polish company or entrepreneur issues and processes invoices.