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Deduction of VAT on construction services

12 May 2017
Przemysław POWIERZA
The correct determination of the inception of the right to deduct VAT on the services covered by the reverse charge upon receipt of an outstanding invoice from a subcontractor, is an important issue in the construction industry. The mechanism of reverse charge of VAT for services listed in Annex 14 to the VAT Act raises further doubts of taxpayers. This time, the issue concerns the determination of the inception of the right to deduct VAT for the General Contractor when he has received an invoice from a subcontractor with a delay of more than three months. It should be considered whether this right arises on general principles, i.e. not earlier than upon receipt of an invoice from a subcontractor, or at the time the tax obligation arises.