Office Private
01. April 2026
Input tax deduction already at the time of the transaction—despite a delayed invoice
Under German law, a business owner may deduct input tax only in the tax period in which all the eligibility requirements of § 15 Abs. 1 No. 1 of the German Value-Added Tax Act (UStG) are met in their entirety. These requirements include an invoice with a separate sales tax statement – If there is a time lag between the receipt of the service and the receipt of the invoice, input tax deduction is only permitted for the tax period in which both conditions are first met. However, the Court of Justice of the European Union sees it differently.
The decision was rendered in a Polish case. Nevertheless, it is equally significant for German law.
The right to input tax deduction is subject to the substantive and procedural requirements and preconditions set forth in the VAT Directive . The substantive requirements are those that govern the actual basis and scope of this right. The procedural requirements govern the modalities and control of its exercise as well as the proper functioning of the value-added tax system, such as obligations regarding record-keeping, invoicing, and tax returns.
The right to input tax deduction arises regardless of whether one is in possession of an invoice, which is merely a formal prerequisite for its exercise. However, the right can generally only be exercised once the taxpayer is in possession of an invoice.
It should be noted that the VAT Directive, as well as the principles of VAT neutrality and proportionality, must be interpreted that they preclude national legislation under which a taxable person exercises his right to deduct input tax in a tax return for the period in which he has met the material requirements for exercising the right to deduction, if he has not received the corresponding invoice during that period, even if he received the invoice before filing the tax return.
It is to be hoped that the tax authorities will take a position on this matter in a timely manner. This is because the decision also raises practical problems. For example, the input tax deduction must be applied to the tax period in which the entitlement arose. Input tax cannot be deducted for a later tax period.
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