Case: Polish tax point rules considered

European Court of Justice (Seventh Chamber),

T. von Danwitz, President of the Chamber, E. Levits (Rapporteur) and P.G. Xuereb, Judges,

Judgement delivered 2 May 2019

Common system of value added tax (VAT) — Directive 2006/112/EC — Article 66 — Chargeable event and chargeability of the tax — Time of the supply of the services — Construction and installation work — Taking into account the time of the acceptance of the work stipulated in the contract for the supply of services

Budimex S.A. v Minister Finansów


Budimex is a Polish construction company. Under the Polish time of supply rules the tax point for construction services is the date an invoice is issued or, if no invoice is issued, 30 days from the date the work was performed (the case did not consider payment, it is assumed that both parties agreed that if payment was received before either of these dates a tax point would be triggered).

Budimex argued that its service was not completed until the customer formally accepted the work. This requirement was written into contracts and there were occasions where customers would not accept the work until Budimex had undertaken further activity (e.g to rectify mistakes or because additional work was required etc). The 30 day time limit for the issue of the invoices thus started on the date of acceptance.

The Polish tax authority argued that the 30 day time limit started when the work was physically completed.

The ECJ agreed with Budimex, it stated that ‘economic and commercial realities form a fundamental criterion for the application of the common system of VAT’ (para 27). Thus, a service was supplied on formal acceptance if:

(a)the formality of acceptance was stipulated by the parties in the contract that binds them according to contractual terms reflecting the economic and commercial realities in the field in which the service is supplied and;

(b)that that formality constitutes the actual completion of the service and determines the amount of consideration due, which is for the referring court to ascertain.


This case will have little impact in the UK. The ECJ reached the expected conclusion, it appears that the Polish tax authority’s position would have caused difficulty for construction businesses had it prevailed.

For commentary on tax point rules see In-depth commentary at ¶11-700.

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