Input tax deduction: CJEU review approaches

The judgment of the General Court of the European Union (GC) (T-689/24) on early input tax deduction has caused quite a controversy. It is now clear that this decision will not be the final word. In its judgment of February 11, 2026, the GC ruled on a Polish request for a preliminary ruling. The General Court’s response to the Polish rules on input tax deduction was clear: If the taxpayer receives the invoice only after the end of the tax period in which the service was provided, but before filing the return for that service period, the taxpayer may already claim the input tax deduction for the period in which the service was performed.  

The judgment caused a lot of discussion in Germany. Just two weeks after the General Court’s judgment, the German Federal Fiscal Court (BFH) already allowed an appeal against a judgment of the Cologne Fiscal Court (dated November 15, 2024 – 9 K 1892/22), citing the General Court’s judgment. This case concerns an input tax deduction for the disputed years 2007 and 2008. The plaintiff had been denied the input tax deduction because a correction to the billing documents he had received during the tax period had only been received afterward, and this correction had no retroactive effect due to the originally missing information (non-correctable invoice). 

Review by the CJEU? 

The significance of the General Court’s decision in Case T-689/24 should therefore not be underestimated. The Advocate General at the CJEU has, in any case, decided to propose that the CJEU review the judgment. It will be interesting to see how the CJEU rules on this matter (the case is pending under Case No. C-167/26 RX). If the review proceedings are initiated, the General Court’s answer will take effect at the end of the proceedings unless the CJEU decides otherwise. However, if the CJEU finds that the General Court’s decision undermines the unity or coherence of EU law, the General Court’s answer will be replaced by the CJEU’s answer to the questions that were the subject of the review. 

Practical Implications 

From a German perspective, it was already clear before the case was referred to the CJEU that further developments needed to be monitored and that applying the General Court’s judgment could not be considered without a case-by-case VAT review (see the Baker Tilly article on the General Court’s decision in Case T-689/24 for more details): The General Court’s judgment appears to contradict the relevant administrative guidelines.  

However, it can be of immediate benefit in the context of defense advice, ongoing tax audits, or proceedings, as demonstrated by the successful appeal against the judgment of the Cologne Fiscal Court. Or, in other words: Keep the assessment open - to be continued… 

We are happy to answer your questions and discuss further considerations.