Invoice with overstated VAT rate vs. right of deduction

Olga Palczewska-Wielińska, Monika Junyszek
Dziennik Gazeta Prawna

As a rule (but subject to exceptions, e.g. under Article 88 of the VAT Act), a customer is entitled to deduct input tax on condition she received an invoice with a stated amount of VAT and the underlying transaction is used for the conduct of her taxable activities. But there may be concerns about whether the right to deduct the tax in full applies also where the VAT amount on the invoice is overstated (e.g. due to the VAT rate used by the supplier being too high or the exchange rate used to translated the VAT amount into PLN being overstated). The tax authorities have a taxpayer-friendly approach to this issue, claiming that where a transaction is taxable, then which VAT rate was used is a matter of secondary importance and the customer has the right to deduct so much tax as was stated on the invoice. The fact remains, however, that the supplier (invoice issuer) is under a duty to revise his invoice while the customer must take account of that revision in his VAT records.