Defective and unreliable invoices make it impossible to deduct VAT

1. Defectiveness and unreliability - lack of statutory definitions

The issue of defective invoices issued by VAT taxpayers and the penal fiscal consequences of issuing or receiving such documents raises taxpayers' doubts. These doubts probably result from the fact that neither the defectiveness nor the unreliability of invoices was defined in the Act of 10 September 1999, the Fiscal Penal Code. However, it was specified when the book may be considered unreliable and when it may be defective. Pursuant to this provision, an unreliable book is a book not kept in accordance with the actual state of affairs. On the other hand, a defective book is a book kept contrary to the law.

2. Unreliable invoice - inconsistent with the facts

On the basis of the above provisions, it can be concluded that the unreliability of the invoice will occur when the content of the document is apparently compliant with the applicable regulations, i.e. in formal terms, the invoice will be issued in accordance with the applicable rules, but its content will be inconsistent with the facts. Therefore, the tax authorities will be able to identify any possible unreliability of the invoice only as a result of an inspection procedure carried out at the taxpayer's (or his contractor's), where the documents held by the taxpayer will be compared with the actual state.

3. Errors in the content of the invoice - document defectiveness

Taking an analogy to the definition of defective tax book, it can be stated that a defective invoice is one that does not contain all the elements it should contain, based on the applicable regulations. In particular, one should bear in mind the provision of § 5 of the Invoice Regulation, which lists all the elements that must be included in the invoice.

When it comes to defective invoices - it is much easier for both the tax authority and contractors to identify this defectiveness. It is enough to check whether the document contains all the necessary elements - that is, whether it was issued in accordance with applicable regulations. The sooner the buyer of the goods or services notices the defectiveness of the invoice, the greater the chances of an effective correction of such a document before a possible tax audit.

4. Penal fiscal consequences

Pursuant to the provisions of the Penal and Fiscal Code, the penalty is imposed not only on unreliable invoice issuance, but also on defective issuance of it. The issue of this type of invoice is treated as a fiscal offense.

A fine for a tax offense is determined in daily rates. One daily rate may not be lower than 1/30 of the minimum wage established on the basis of the Act of 10 October 2002 on the minimum wage for work. The fine may not exceed four hundred times the minimum daily rate. When determining the daily rate, the perpetrator's income, personal conditions, family situation, property relations and earning potential are taken into account.

In relation to the perpetrator who, contrary to his obligation, does not issue invoices, issues them incorrectly or refuses to issue them, the maximum fine is 180 daily rates. For unreliably issued invoices, the penalty is higher and amounts to 240 daily rates.