In accordance with the applicable provisions of Polish tax law, tax liabilities become time-barred after a period of 5 years. As of December 31st, 2025, the limitation period for the right to deduct input VAT resulting from transactions carried out in previous years will expire.
What is subject to the statute of limitations?
On December 31st, 2025, the following will become time-barred:
- The right to deduct input VAT arising in 2021, as well as in 2020, in the case of intra-Community acquisitions of goods (ICA) and the reverse charge mechanism (RCh)
- The liability arising from the excess of output VAT over input VAT, where the obligation to pay arose in 2020
If the taxpayer fails to reduce the amount of output tax by the amount of input tax within the time limits specified in Article 86(10), (10d), (10e), and (11) of the VAT Act, they may, pursuant to Article 86(13) of the VAT Act, reduce the amount of output tax by submitting a correction to the tax return for the period in which the right to reduce the output tax arose. However, this must be done no later than within 5 years counting from the beginning of the year in which the right to reduce the amount of output tax arose.
This provision implies that input VAT, in respect to which the right to reduction arose in 2021, and in the case of ICA and RCh, in 2020, may be settled by submitting a corrected tax return to the tax office no later than on December 31st, 2025.
According to Article 59 §1(9) in conjunction with Article 70 §1 of the Tax Ordinance Act, the general rule is that the limitation period expires after five years, counting from the end of the calendar year in which the tax payment deadline occurred. Therefore, all liabilities arising from output VAT due in 2020 (excluding December, for which the payment deadline falls in January 2021) will become time-barred at the end of 2025.
Our recomendation
We recommend verifying whether all invoices entitling the taxpayer to reduce output tax by input tax for the specified periods have been properly included in the tax settlements. At the same time, please note that in case of a requirement to submit the application for the determination of overpayment, such an application must be submitted no later than by the end of the current year. Applications submitted after this deadline, i.e., in the following year, will be rejected in accordance with Article 79 of the Tax Ordinance Act.
