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DWF in Poland advises Irish construction company in dispute over VAT

22 March 2024
DWF in Poland, the global provider of integrated legal and business services, has advised an Irish construction sector company in a dispute with the tax authority over the refund of excess VAT for 2014.

DWF's tax team of Adrian Jonca (Partner), Izabela Plis (Counsel) and Konrad Suchojad (Senior Associate) advised an Irish road and motorway construction company in a dispute with the tax authorities regarding the refund of input VAT for 2014.

The tax authority refused the company's right to reimbursement of the excess of input VAT over output VAT on the grounds that the company's right to benefit from the relief set out in Article 89a(2)(5) of the Value Added Tax Act, in the wording in force until 31 December 2012, was not taken into account (the so-called bad debt relief). The axis of the dispute concerned the Taxpayer's refusal to benefit from the bad debt relief due to the (incompatible with EU law) national restrictions.

The DWF team in Poland represented the client at each stage of the proceedings, arguing that the content of the tax authority's decision (refusing the Taxpayer the right to benefit from the bad debt relief, and as a consequence, refusing a refund of the excess of input tax over output tax in a significant amount) is grossly inconsistent with the interpretation of EU law (in particular, it is inconsistent with the principles of proportionality and neutrality of VAT taxation), which was later confirmed by the CJEU in ruling that the additional conditions necessary for taxpayers to benefit from the relief in question, as set out in national law, are inconsistent with the VAT Directive.

Finally, after a long-running dispute, the company was refunded the input VAT with the credit interest due for many years.

For more information, please contact:

Dorota Roesler, Head of Marketing and BD
Tel: +48 22 653 4298
Email: dorota.roesler@dwf.law 

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