Poland: You can now apply for a refund on VAT sanctions

If you had irregularities in your VAT settlement you might be burdened with additional obligatory tax liabilities. If those liabilities were unintentional you can now apply for a refund on these additional levied fees.

In this regard, the Court of Justice of the European Union (CJEU) reached a verdict on the 15th of April 2021. CJEU ruled in the Polish case “No. C-935/19 Grupa Warzywna LLC vs. Director of the Tax Administration Chamber in Wroclaw” that the principle of VAT proportionality is opposed to the current implementing regulations that impose additional tax liabilities (VAT sanction) on taxpayers without first distinguishing (analyzing) the circumstances that gave rise to those defaults.

The CJEU ruled that the Polish regulations, in this case, were not an adequate solution to reduce VAT fraud but they rather worked disproportionally.  This is because these rules do not allow for an individual approach to taxpayers who have incorrectly accounted for VAT and it does not take into account the extent and type of the violation of the tax law committed by taxpayers.