Publication of the ECJ’s judgment on neutrality of ICA settlements

10 May 2021 marks the date of publication in the EU Official Journal of the judgment passed by the European Court of Justice (“Court”) on 18 March 2021, in which the court held that the Polish tax rules which conditioned neutrality of intra-Community acquisition of goods on timely settlement of the output VAT in the VAT return were incompliant with the VAT Directive.

According to the regulations contested by the Court, taxpayers performing transactions of intra-Community acquisition of goods had to declare the output VAT in the relevant return within three months of the end of the month in which the tax obligation arose. A delay in complying with this obligation resulted in the transaction no longer being tax-neutral: the output VAT still had to be shown in the return for the period in which the tax obligation arose, but the input VAT could only be settled in the current return, and consequently late payment interest frequently had to be paid.

The judgment of the Court enables recognizing the late payment interest as overpayment of the tax and recovering the amounts together with interest.

In our opinion, said judgment, even though it was passed in a case involving intra-Community acquisition of goods only, may apply to similar legislation governing import of services, transactions settled by the buyer on a reverse-charge basis and non-transactional movement of goods.

Publication of the conclusion of the Court’s judgment is important from the procedural point of view. If requests were made for acknowledgment of overpayment before this event, the tax authorities should return the overpaid amount within 30 days of publication of the judgment. In this case, the interest on overpayment accrues from the date of its occurrence until the date of return. Interest of the same amount is payable to taxpayers who lodge a request for acknowledgment of overpayment within 30 days of publication of the judgment.

Additionally, publication of the judgment offers grounds for resumption of tax proceedings in cases where the final decision has already been passed. To this end, the taxpayer must submit a request for resuming proceedings within a month of publication of the Court’s judgment.

The publication also enables taxpayers to simplify their current settlements.

If you are interested in more information on how the publication may affect your business, you are welcome to contact us.


Aleksandra Kalinowska Partner, Warsaw

T: +48 22 690 08 70
M: +48 724 440 693

Elżbieta Lis Partner, Katowice

T: +48 32 731 68 58
M: +48 664 948 038