CJEU Review of the Judgment on VAT Deduction Periods

We recently brought to your attention a surprising judgment by the General Court of the EU in Case T-689/24 I.T.A., in which the Court ruled that the right to a VAT deduction must, in principle, be granted to taxable persons for the tax period in which the supply occurred, provided they hold the relevant invoice by the date the tax return is filed, rather than by the end of that specific period. As noted in our previous article, this judgment appeared to conflict with established case law.

Due to the severity of this contradiction, the First Advocate General submitted a proposal to initiate a review procedure of the General Court's judgment before the Court of Justice of the European Union (CJEU). These proceedings, under Case C-167/26 RX, are currently ongoing, and the effectiveness of the contested judgment has been suspended pending their conclusion. The General Financial Directorate (GFŘ) of the Czech Republic also highlighted this fact in a recent communication (available here).

Consequently, at least until a final decision is issued by the CJEU, it is necessary to continue following the rules set out in Section 73 of the Czech VAT Act: the right to a tax deduction can be exercised no earlier than the tax period in which the taxpayer received the relevant invoice.

We will continue to monitor the progress of these proceedings and will, of course, inform you of the final outcome.

This text was translated by AI.