On April 22, 2021, the AG issued his Opinion in the case C-80/20 (Wilo Salmson Frace) related to the input VAT deduction without valid invoice.
Context: Request for a preliminary ruling – Tax law – VAT – Directive 2006/112 / EC – Art. 167 and 178 letter a – Creation of the right to deduct – Creation period – Possession of an invoice as a material requirement – Differentiation from the formal requirements for input tax deduction – Refund Directive (Directive 2008 / 9 / EG) – Art. 14 Para. 1 Letter a and Art. 15 – Finality of an uncontested negative decision – Legal consequences of the cancellation (annulment) of an invoice and its reissue
Article in the EU VAT Directive
Article 167 and 178 of Directive 2006/112/EC
Article 167
A right of deduction shall arise at the time the deductible tax becomes chargeable.
Article 178
In order to exercise the right of deduction, a taxable person must meet the following conditions:
(a) for the purposes of deductions pursuant to Article 168(a), in respect of the supply of goods or services, he must hold an invoice drawn up in accordance with Sections 3 to 6 of Chapter 3 of Title XI;
(b) for the purposes of deductions pursuant to Article 168(b), in respect of transactions treated as the supply of goods or services, he must comply with the formalities as laid down by each Member State;
(c) for the purposes of deductions pursuant to Article 168(c), in respect of the intra-Community acquisition of goods, he must set out in the VAT return provided for in Article 250 all the information needed for the amount of VAT due on his intra-Community acquisitions of goods to be calculated and he must hold an invoice drawn up in accordance with Sections 3 to 5 of Chapter 3 of Title XI;
(d) for the purposes of deductions pursuant to Article 168(d), in respect of transactions treated as intra-Community acquisitions of goods, he must complete the formalities as laid down by each Member State;
(e) for the purposes of deductions pursuant to Article 168(e), in respect of the importation of goods, he must hold an import document specifying him as consignee or importer, and stating the amount of VAT due or enabling that amount to be calculated;
(f) when required to pay VAT as a customer where Articles 194 to 197 or Article 199 apply, he must comply with the formalities as laid down by each Member State.
Article 14(1)(a) of Directive 2008/9/EC
Facts
A Romanian referral regarding the interpretation of Article 167 of the VAT Directive, read in conjunction with Article 178. Is there a distinction between the moment the right of deduction arises and the moment it is exercised with regard to the way in which the VAT system operates; whether the right to deduct VAT may be exercised where no (valid) tax invoice has been issued for the purchase of goods? Can an application for a refund be made in respect of VAT which became chargeable prior to the ‘refund period’ but which was invoiced during the refund period? What are the effects of the annulment of invoices and the issuing of new invoices? Can national legislation make the refund of VAT conditional on the chargeability of VAT in a situation where a corrected invoice is issued during the application period?
Questions
As regards the interpretation of Article 167 of Directive 2006/112/EC, read in conjunction with Article 178 thereof, is there a distinction between the moment the right of deduction arises and the moment it is exercised with regard to the way in which the system of VAT operates?
To that end, it is necessary to clarify whether the right to deduct VAT may be exercised where no (valid) tax invoice has been issued for purchases of goods.
As regards the interpretation of Articles 167 and 178 of Directive 2006/112/EC, read in conjunction with the first sentence of Article 14(1)(a) of Directive 2008/9/EC, 2 what is the procedural point of reference for determining the lawfulness of the exercise of the right to a refund of VAT?
To that end, it is necessary to clarify whether an application for a refund may be made in respect of VAT which became chargeable prior to the ‘refund period’ but which was invoiced during the refund period.
As regards the interpretation of the first sentence of Article 14(1)(a) of Directive 2008/9/EC, read in conjunction with Article 167 and Article 178 of Directive 2006/112/EC, what are the effects of the annulment of invoices and the issuing of new invoices in respect of purchases of goods made before the ‘refund period’ on the exercise of the right to a refund of the VAT relating to those purchases?
To that end, it is necessary to clarify whether, in the event of the annulment, by the supplier, of the invoices initially issued for the purchase of goods and the issuing of new invoices by that supplier at a later date, the exercise of the right of the recipient to apply for a refund of the VAT relating to the purchases is to be linked to the date of the new invoices, in a situation where the annulment of the initial invoices and the issuing of the new invoices is not within the recipient’s control but is exclusively at the supplier’s discretion.
May national legislation make the refund of VAT granted under [Directive 2008/9/EC] conditional upon the chargeability of the VAT in a situation where a corrected invoice is issued during the application period?
AG Opinion
1. The VAT Directive is to be interpreted as meaning that the right of deduction under Article 168(a) of the VAT Directive arises in principle once the tax has become chargeable (Article 167 of the VAT Directive) and in a given amount once an invoice is held (Article 178(a) of the VAT Directive). The correct period for exercising the right of deduction is determined based on when those two conditions are fulfilled. Although the invoice required for that purpose need not fulfil all the formalities specified in Article 226 of the VAT Directive, the VAT Directive does not provide for a right of deduction if no invoice is held.
2. The correct refund period within the meaning of Article 14(1)(a) of the Refund Directive is the period in which the taxable person held such an invoice. The referring court must clarify when that was in the applicant’s case.
3. The (mutually agreed or unilateral) cancellation (annulment) of an invoice has no effect on a right of deduction that has already arisen or on the period in which it is to be exercised.
4. EU law precludes national regulations which link the refund period within the meaning of Article 14(1)(a) of the Refund Directive solely to the time when the tax becomes chargeable in accordance with Article 167 of the VAT Directive. It is also necessary to hold an invoice showing the amount charged in VAT, even if the invoice does not fulfil all the formalities specified in Article 226 of the VAT Directive.
Decision
Personal comments/VATupdate
Source
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