Where Deduction Loses Its Name: A Comparative Analysis of I. S.A. and Terra Baubedarf

New
Journal
Author
Echevarría Zubeldia, G.
Country
European Union
Published Date
Issue
International VAT Monitor 2026 (Volume 37), No. 5
FormatPDF
EUR
45
| USD
50 (VAT excl.)

In its judgment of 11 February 2026 in Case T-689/24, I. S.A., the General Court ruled that the right of deduction comes into existence once the substantive conditions are satisfied, that is, when the tax becomes chargeable and the transaction has actually been carried out, and that a late invoice cannot be used as a device to push that right into a later period. Conditioning deductions on holding an invoice within the same tax period, even where the invoice is in hand before the VAT return is filed, is incompatible with articles 167, 168 and 178 of the VAT Directive and runs counter to the principles of neutrality and proportionality.