Judgment;Summary — ECLI:EU:C:2023:430
Date: 2023-05-25
Language of the case: Polish
Court formation: Tenth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Poland

Summary C-114/22 – 1 
Case C-114/22 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
18 February 2022 
Referring court: 
Naczelny Sąd Administracyjny (Poland) 
Date of the decision to refer: 
23 November 2021 
Appellant: 
Dyrektor Izby Administracji Skarbowej w Warszawie 
Respondent: 
W. Sp. z o.o. 
  
Subject matter of the main proceedings 
Value added tax (VAT); right to deduct 
Subject matter and legal basis of the request 
VAT Directive; Article 267 TFEU 
Question referred for a preliminary ruling 
Must the provisions of Articles 167, 168(a), 178(a) and 273 of Council Directive 
2006/112/EC of 28 November 2006 on the common system of value added tax 
(OJ 2006 L 347, p. 1) and the principles of neutrality and proportionality be 
interpreted as precluding a national provision, such as Article 88(3a)(4)(c) of the 
Ustawa z dnia 11 marca 2004 r. o podatku od towarów i usług (Law of 11 March 
2004 on the Tax on Goods and Services, Dziennik Ustaw (Journal of Laws) of 
2011, No 177, item 1054, as amended), which deprives a taxable person of the 
right to deduct VAT on the acquisition of a right (asset) deemed to have been 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-114/22 
 
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made under false pretences within the meaning of the provisions of national civil 
law, irrespective of whether the result sought was a tax advantage, the granting of 
which would be contrary to one or more of the objectives of the directive and 
whether it constituted the principal aim of the contractual approach adopted? 
Provisions of European Union law relied on 
Council Directive 2006/112/EC of 28 November 2006 on the common system of 
value added tax, as amended by Council Directive 2010/45/EU of 13 July 2010 
(‘the VAT Directive’): Articles 167, 168(a), 178(a) and 273 
Provisions of national law relied on 
Ustawa z dnia 11 marca 2004 r. o podatku od towarów i usług (Law of 11 March 
2004 on the Tax on Goods and Services, Dziennik Ustaw (Journal of Laws) of 
2011, No 177, item 1054, as amended, ‘the VAT Law’) 
Article 88(3a)(4)(c): 
3a. Invoices and customs documents shall not form the basis for reducing output 
tax and refunding the tax difference or refunding input tax where these: 
… 
c) document transactions to which the provisions of Articles 58 and 83 of the Civil 
Code apply – in the part concerning those transactions. 
Ustawa z dnia 23 kwietnia 1964 r. Kodeks cywilny (Law of 23 April 1964 – Civil 
Code, consolidated text: Dziennik Ustaw (Journal of Laws) of 2020, item 1740, as 
amended, ‘the CC’) 
Article 58 
§ 1. A legal transaction contrary to the law or intended to circumvent the law shall 
be void unless a relevant provision provides otherwise, in particular that the 
invalid provisions of the legal transaction are to be replaced by the relevant 
provisions of the law. 
§ 2. A legal transaction contrary to the rules of social conduct shall be void. 
… 
Article 83 
§ 1. A declaration of intent made under false pretences to another party with that 
party’s consent shall be invalid. Where such a declaration is made to conceal 
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another legal transaction, the validity of the declaration shall be judged by the 
nature of that legal transaction. 
§ 2. Making a declaration of intent under false pretences shall not affect the 
effectiveness of a legal transaction involving consideration and made on the basis 
of that declaration, if as a result of that legal transaction a third party acquires a 
right or is released from an obligation, unless that third party has acted in bad 
faith. 
Succinct presentation of the facts and procedure in the main proceedings and 
the essential arguments of the parties 
1 By decision of 20 October 2017, the Naczelnik Urzędu Skarbowego W. (Head of 
the Tax Office in W.) determined for the applicant, inter alia, the amount of 
excess of input tax over output tax to be refunded and the amount of excess of 
input tax over output tax to be deducted in subsequent settlement periods for 
October 2015. The authority challenged the sale of trademarks to the applicant 
and considered it void under Article 58(2) of the Civil Code (as contrary to the 
rules of social conduct), which was the basis for depriving the taxable person, 
pursuant to Article 88(3a)(4)(c) of the VAT Law, of the right to deduct VAT from 
the invoice dated 27 October 2015 issued by the seller. 
2 By decision of 11 October 2018, the Dyrektor Izby Administracji Skarbowej w 
Warszawie (Director of the Tax Administration Chamber in Warsaw, ‘the DIAS’) 
upheld the above decision, but cited as grounds for the refusal the fact that the 
transaction involving the sale of trademarks was conducted under false pretences 
within the meaning of Article 83 of the Civil Code. 
3 The party appealed against the DIAS’s decision to the Wojewódzki Sąd 
Administracyjny w Warszawie (Regional Administrative Court in Warsaw, 
Poland), which annulled the above decision and ruled that the tax authorities had 
failed to demonstrate that the sale in question was made under false pretences. 
4 Subsequently, the DIAS brought an appeal on a point of law against that judgment 
before the Naczelny Sąd Administracyjny (Supreme Administrative Court, 
Poland – the referring court). 
Succinct presentation of the reasoning in the request for a preliminary ruling 
5 In the view of the referring court, the legal basis adopted by the authority for 
refusing the right to deduct VAT raises doubts as to whether it is grounded in the 
provisions of the VAT Directive. 
6 It is undisputed that the applicant included in its VAT purchase register the 
invoice dated 27 October 2015 relating to the purchase of trademarks, and in its 
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VAT return it recognised the amount of VAT from that invoice to be deducted 
(refunded). 
7 It is also undisputed that the seller submitted a VAT return recognising the above 
transaction, which was taxed at 23%, and that the tax was paid. 
8 However, the DIAS refused the right to deduct VAT, holding that the transaction 
had been conducted under false pretences within the meaning of Article 83 of the 
Civil Code. 
9 Article 83 of the Civil Code governs the effects of declarations of intent made 
under false pretences in the sphere of private civil law. 
10 Article 88(3a)(4)(c) of the VAT Law deprives a taxable person of the right to 
deduct VAT where a tax authority finds that the taxable person conducted a legal 
transaction that was void within the meaning of Article 58 or 83 of the Civil Code. 
11 On the other hand, the VAT Directive does not contain any provisions that would 
make it possible to deny the right to deduct tax as a result of a transaction not 
being compliant with the requirements of national civil law. According to the 
Court’s case-law, the right to deduct tax is an integral part of the VAT system and 
in principle may not be limited. Thus, the possible invalidity of a legal transaction 
under civil law should not result in an automatic exclusion of the right to deduct 
VAT. This is supported by the argument that VAT is autonomous in relation to 
civil law norms and is neutral from the point of view of entities participating in 
business transactions. 
12 It follows from the Court’s case-law that it is not the invalidity of the taxable 
person’s transaction under civil law that may result in the buyer being deprived of 
the right to deduct VAT, but rather the finding that the result sought was a tax 
advantage, the granting of which would be contrary to one or more of the 
objectives of the directive, and that it constituted the principal aim of the 
contractual approach adopted, which would indicate an abuse of law. 
13 An abusive practice can be found to exist only if, first, the transactions concerned, 
notwithstanding formal compliance with the conditions laid down by the relevant 
provisions of the directive and the national legislation transposing it, result in the 
accrual of a tax advantage, the granting of which would be contrary to the purpose 
of those provisions. 
14 Second, it must also be apparent from a number of objective factors that the 
essential aim of the transactions concerned is to obtain a tax advantage. In order to 
assess whether the purpose of the transactions at issue was to obtain a tax 
advantage, the actual content and meaning of those transactions must be 
determined. 
15 The prohibition of abuse is not relevant where the transactions in question carried 
out may have some explanation other than the mere attainment of tax advantages 
DYREKTOR IZBY ADMINISTRACJI SKARBOWEJ W WARSZAWIE 
 
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(judgment of 21 February 2006, Halifax, C-255/02, EU:C:2006:121, 
paragraph 75). 
16 In its judgment of 21 February 2008, Ministero dell’Economia e delle Finanze v 
Part Service (C-425/06, EU:C:2008:108, paragraph 58), the Court held that in 
order to assess whether the transactions in question can be held to constitute an 
abusive practice, ‘the national court must verify, first, whether the result sought is 
a tax advantage, the granting of which would be contrary to one or more of the 
objectives of the Sixth Directive and, then, whether that constituted the principal 
aim of the contractual approach adopted’. 
17 In the VAT Law, provisions relating to the concept of abuse of law have been in 
force since 1 July 2016. 
18 Article 5(4) of the VAT Law provides that in the case of an abuse of law, the 
actions referred to in Article 5(1) only produce such tax effects as would occur if 
the situation were to be recreated in the absence of the actions constituting that 
abuse. 
19 On the other hand, Article 5(5) of the VAT Law provides that an abuse of law is 
construed as engaging in the actions referred to in Article 5(1) within the 
framework of a transaction which, despite meeting the formal conditions 
stipulated in statutory provisions, is in principle aimed at obtaining a tax 
advantage, the granting of which would be contrary to the objective served by 
those provisions. 
20 The provisions in question generally correspond to the concept of abuse of tax law 
as defined in the Court’s case-law. 
21 The point is, however, that the definition of the notion of abuse of law in 
Article 5(5) of the VAT Law has not resulted in any amendment to the national 
provisions governing cases where a taxable person is deprived of the right to 
deduct tax. None of the standards stipulated in Article 88 of the VAT Law refers 
to Article 5(5) of the VAT Law and the consequences in terms of VAT of actions 
constituting an abuse of tax law. It has become accepted in domestic tax practice 
that the consequences arising from the abuse of tax law should be derived from 
Article 88(3a)(4)(c) of the VAT Law. However, in that regard, it must be borne in 
mind that, as the Court has repeatedly held, the right to deduct provided for in 
Article 167 et seq. of the VAT Directive is an integral part of the VAT scheme 
and in principle may not be limited. In particular, that right is exercisable 
immediately in respect of all the taxes charged on transactions relating to inputs 
(see, inter alia, judgments of 21 March 2001, Gabalfrisa and Others, C-110/98 to 
C-147/98, EU:C:2000:145, paragraph 43, and of 6 June 2006, Axel Kittel and 
Recolta Recycling, C-439/04 and C-440/04, EU:C:2006:446, paragraph 47). 
22 That is because the deduction system is intended to relieve the trader entirely of 
the burden of the VAT payable or paid in the course of all his economic activities. 
The common system of VAT consequently ensures complete neutrality of taxation 
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of all economic activities, whatever their purpose or results, provided that they are 
themselves subject in principle to VAT (see, inter alia, judgments of 21 February 
2006, Halifax and Others, C-255/02, EU:C:2006:121, paragraph 78, and of 6 July 
2006, Axel Kittel and Recolta Recycling, C-439/04 and C-440/04, EU:C:2006:446, 
paragraph 48). 
23 It follows that, in so far as the taxable person, acting as such at the time when he 
acquires goods or receives services, uses those goods or services for the purposes 
of his taxed transactions, he is entitled to deduct the VAT paid or payable in 
respect of those goods or services (see judgment of 14 September 2017, Iberdrola 
Inmobiliaria Real Estate Investments, C-132/16, EU:C:2017:683, paragraph 27 
and the case-law cited). 
24 It also follows from the case-law of the Court that derogations from the right to 
deduct VAT are permitted only in the cases expressly provided for in the 
directives governing that tax (see, inter alia, judgment of 19 September 2000, 
Ampafrance and Sanofi, C-177/99 and C-181/99, EU:C:2000:470, paragraph 34) 
and are to be interpreted strictly (judgment of 22 December 2008, Magoora, 
C-414/07, EU:C:2008:766, paragraph 28). 
25 Furthermore, the Court points out that preventing possible tax evasion, avoidance 
and abuse is an objective recognised and encouraged by the VAT Directive (see, 
inter alia, judgments of 21 February 2006, Halifax and Others, C-255/02, 
EU:C:2006:121, paragraph 71, and of 7 December 2010, R., C-285/09, 
EU:C:2010:742, paragraph 36). On that point, the Court has held that Community 
law cannot be relied on for abusive or fraudulent ends (see, in particular, judgment 
of 3 March 2005, Fini H, C-32/03, EU:C:2005:128, paragraph 32). 
26 Therefore, it is a matter for the national authorities and courts to refuse to allow 
the right to deduct where it is established, on the basis of objective evidence, that 
that right is being relied on for fraudulent or abusive ends (see, inter alia, 
judgment of 29 March 2012, Véleclair, C-414/10, EU:C:2012:183, paragraph 32). 
27 Under Article 273 of the VAT Directive, the Member States may adopt measures 
to ensure the correct collection of VAT and to prevent evasion. In particular, in 
the absence of provisions of EU law on that matter, the Member States have the 
power to choose the sanctions which seem to them to be appropriate in the event 
that conditions laid down by EU legislation for the exercise of the right to deduct 
VAT are not observed (judgment of 8 September 2019, EN.SA, C-712/17, 
EU:C:2019:374, paragraph 38 and the case-law cited). 
28 Nevertheless, the Member States must exercise that power in accordance with EU 
law and its general principles and, consequently, in accordance with the principles 
of neutrality and proportionality (see the judgment of 26 April 2017, Spliethoff’s 
Bevrachtingskantoor v Commission, C-564/15, EU:C:2017:302, paragraph 59 and 
the case-law cited). 
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29 In that context, it would appear that depriving a taxable person of the right to 
deduct VAT on the basis of Article 273 of the VAT Directive would require that 
the national legal order lay down, with due regard to Articles 167, 168 and 178, 
and to the principles of neutrality and proportionality, an unequivocal standard 
stipulating that invoices and customs documents cannot be the basis for a 
reduction of input tax or a refund of the tax difference if the invoices, correcting 
invoices or customs documents issued document transactions which involve 
criminal offences or abuse of tax law within the meaning of Article 5(5) of the 
VAT Law. 
30 A standard such as Article 88(3a)(4)(c) of the VAT Law, referring in that respect 
to ‘transactions to which the provisions of Articles 58 and 83 of the Civil Code 
apply’, cannot be regarded as identical to the standard referring to the concept of 
abuse of tax law, including within the meaning of Article 5(5) of the VAT Law. 
31 As has already been stated, Articles 58 and 83 of the Civil Code indicate where 
transactions are void from the civil law point of view rather than from the abuse of 
tax law point of view. The issue of invalidity of civil law transactions due to their 
being conducted under false pretences is irrelevant for VAT purposes where the 
transactions in question may have some explanation other than the mere 
attainment of tax advantages. 
32 The effects of such a regulation are visible in the case at hand, where the tax 
authority has focused on demonstrating the invalidity of the civil law transaction 
due to its being conducted under false pretences, only briefly referring to the issue 
of abuse of tax law. 
33 If, in principle, a taxable person for VAT purposes has the right to deduct the 
input tax shown in invoices documenting the acquisition of goods or services, and 
that right is not a relief or exemption but a fundamental structural feature of VAT 
which ensures the neutrality of that tax for taxable persons, then any limitation of 
that right – including that arising from the application of Article 273 of the VAT 
Directive – must be clearly defined for taxable persons in normative terms and 
interpreted strictly in accordance with those norms, rather than in a manner which 
is not apparent from the content of the provisions enacted. Only such an approach 
will provide certainty to the taxable person who engages in business activity as to 
the scope of his legitimate activities, engaging in which will not expose that 
taxable person to adverse tax consequences (legal certainty). The disputed 
provision in the VAT Law makes the taxable person’s situation uncertain, because 
a tax authority, guided by the invalidity criteria arising from civil law, may 
deprive the taxable person of the right to deduct tax, claiming that any such 
invalidity has tax consequences, as indicated by the practice of domestic tax 
authorities in that regard. 
34 It is clear that, in applying national law, a national court is required to interpret 
that law, as far as possible, in the light of the wording and purpose of the directive 
in order to achieve the aim of the directive. However, it appears that remedying 
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that state of affairs through the case-law of the national courts, which would entail 
a provision such as Article 88(3a)(4)(c) of the VAT Law being interpreted through 
the prism of abuse of tax law, runs counter to the principle of legal certainty 
understood as a system of clear and explicit rules which make it possible for the 
addressees to determine their legal position and the legal consequences of their 
actions, since, with respect to a structural element of VAT such as the right to 
deduct VAT in connection with the principle of neutrality, the remedy in question 
would require that right to be limited on the basis of a criterion which does not 
follow from the provision in question. That would imply reliance on the direct 
effect of the directive vis-à-vis natural and legal persons (taxable persons) – by 
providing an interpretation consistent with the objectives of the directive – in a 
situation where the relevant criterion for a significant limitation of the taxable 
person’s rights which would be in accordance with the VAT Directive is not 
mentioned at all in the wording of the interpreted provision. 
35 It would therefore appear that an interpretation of the provision in question that is 
consistent with the objectives of the directive goes beyond the possible limits of 
interpretation within which the national court may rule without undermining the 
taxable person’s guarantee of legal certainty.