In its current judgment Vădan (judgment of 21.11.2018 – C-664/16) the ECJ states, for the first time, that the submission of invoices is not a mandatory requirement for the deduction of input VAT. The strict application of the requirement to produce invoices would conflict with the principles of neutrality and proportionality. Hence, taxable persons can also claim input VAT deduction if they are able to prove the necessary (substantive) requirements by means of objective evidence. Taxable persons that were denied the right to deduct input VAT by the tax authorities, due to a lack of invoices, should now (re-)examine whether they can provide objective evidence by other means.

Numerous legal questions exist concerning the settlement of past property developer cases. The German Federal Fiscal Court recently ruled on one of these issues: A property developer's claim for a VAT refund is not dependent upon whether he has paid the tax amount to the supplier or whether the tax authority can offset it. The findings of the German Federal Fiscal Court are not only positive for property developers but also other business sectors, such as purchasing associations, who could benefit.

With its most recent referral to the ECJ, the German Federal Fiscal Court (decision of 02.08.2018 – V R 33/17) opens the discussion as to what extent VAT rate reductions are applicable beyond their wording, even if (only) comparable services are rendered. In this context, the Federal Fiscal Court refers to the principle of equal treatment pursuant to Art. 20 of the Charter of Fundamental Rights of the EU. The future scope of the application of the reduced VAT rate could thus be significantly extended. Entrepreneurs should closely follow the further proceedings of the referral. In certain cases, it may now already be recommendable to examine the question of the applicability of a reduced VAT rate.