In order to protect invoice recipients whose input VAT deductions are denied, the ECJ developed the direct claim (Reemtsma claim) in 2007. However, in a recent case where an invoice incorrectly showed German VAT instead of Italian VAT, the ECJ raised significant hurdles for making such a claim: Firstly, the invoice recipient would have had to prioritise efforts to obtain an invoice with Italian VAT and the reimbursement of Italian VAT. Secondly, it is detrimental to the direct claim if the tax office has already refunded the German VAT to the issuer of the invoice. Is ‘first come, first served’ now the new principle?

In Germany, e-invoicing will be obligatory for domestic B2B supplies between established companies from 1 January 2025. Yesterday, around two and a half months before the introduction of the e-invoicing obligation, a corresponding Finance Ministry Circular was published. The Circular contains clarifications which were not included in the draft circular published in June 2024.

The supply of electricity by a landlord can, under certain conditions, constitute an independent taxable supply. The supplier of tenant electricity is then entitled to full input VAT deduction from the purchases that are directly and immediately related to the taxable supply of electricity. In its decision published on 26 September 2024, the Federal Fiscal Court clarifies the specific conditions required for a taxable supply to be deemed to be independent and explicitly deviates from the view of the tax authorities (sec. 4.12.1 para. 5 sentence 3 of the German Administrative VAT Guidelines).