For VAT-registered entrepreneurs (PKP), VAT paid on purchases — input VAT — can be credited against VAT on sales (output VAT). This keeps VAT neutral for businesses, provided the requirements are met.
Key requirements
- The input VAT relates directly to business activities.
- It is supported by a valid tax invoice recorded in the DGT system.
- The seller has reported the invoice in its VAT return.
- It is credited in the same tax period, or no later than three tax periods after the period in which the invoice was issued, provided it has not been expensed or audited.
Input VAT that cannot be credited
- Purchases unrelated to business activities.
- Acquisition and maintenance of sedans or station wagons, unless held as trading stock or for rent.
- Incomplete or non-compliant tax invoices.
- Purchases related to VAT-exempt supplies.
Tips in the Coretax era
- Check input invoices monthly and contact suppliers promptly if an invoice is missing.
- Match tax ID, tax base and VAT against the commercial invoice before paying.
- Keep supporting documents (contracts, POs, delivery notes); an invoice alone is not always enough in an audit.
- Track the three-period limit so crediting rights do not lapse.
Hanna Consulting helps VAT-registered businesses with monthly VAT reviews, equalisation and invoice process improvements.
