Application of the principle of legitimate expectations in value-added tax: a case study

Abstract

The aim of the article is to define the relationship between the EU and national principles of the protection of legitimate expectations applied in the area of harmonized VAT. It is assumed that these principles in the EU and national perspectives – despite the common denominator – do not overlap. In the case of the harmonized area, priority is always given to the guarantee framework of the analysed principle set by the case law of the CJEU, even if it limits the scope of application of the principle on national grounds. The research material consists of representative judgments of the CJEU dealing with the essence of the principle of the protection of legitimate expectations, its sources and the reasons for its application, and the views of domestic and foreign doctrine. The conclusions of the analysis were referred to selected factual situations on the basis of which rulings of the Supreme Administrative Court were made, taking into account the principle in the domestic context. The analysis of the principle shows that the scope of protection is different in the case of harmonized and not harmonized tax law. The EU principle tends to be more limited than its national counterparts. First and foremost, the principle will not apply in the case of MS practice contrary to EU regulation, even if it is beneficial to the individual. Nor can legitimate expectations arise in the case of an abuse of rights or a breach of law, even if the unlawful state created by the individual was tolerated by the EU or national authorities. The analysis of the use of the principle of legitimate expectations in Polish VAT jurisprudence carried out in the article leads to the conclusion that it is much more widely applied than would be the case in accordance with EU doctrine and jurisprudence, which indicates the need for changes in this respect.