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Umsatzsteuer Newsletter 49/2020
Federal Ministry of Finance letter on retroactive effect of invoice correction and deduction of input VAT without a proper invoice
The long-awaited Federal Ministry of Finance letter on the retroactive effect of invoice correction and the deduction of input VAT, in the absence of a proper invoice, has now been published. The Federal Ministry of Finance’s letter implements the ECJ case law of 15 September 2016 in the cases of Senatex and Barlis 06, as well as other subsequent rulings. Accordingly, an incorrect invoice, which contains the five core characteristics, can now be corrected retroactively. In the instance of a presumed reverse charge case, showing VAT retroactively is also possible. A retroactive correction of an invoice is also possible in circumstances where the correction is made by cancelling and issuing a new invoice. Input VAT can also be deducted from an incorrect invoice without an invoice correction if the taxable person is able to provide objective proof in other ways. However, according to the Federal Ministry of Finance, showing VAT in an invoice is a key element and cannot be replaced by any other form of evidence. Furthermore, input VAT deduction, without an invoice, remains impossible.
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Umsatzsteuer Newsletter 48/2020
Tax Court Affirms Chain Transaction in the Case of Partial Transport Orders
In a chain transaction, the goods must be shipped directly from the first supplier to the last customer. Whether this is also the case when the first supplier and the last buyer each order a partial transport (so-called “broken transport”) is disputed. In its judgement of 17.06.2020 (ref. 7 K 7214/17), the tax court Berlin-Brandenburg affirmed the chain transaction, despite broken transport. The effect of the judgement should be manageable. It is only convincing to a limited extent and the other Member States concerned are not bound by it.
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Umsatzsteuer Newsletter 47/2020
Denial of input VAT deduction or zero-rating due to tax fraud and allegation a taxpayer "should have known?" – current developments
If a participant in a supply chain commits VAT fraud, the tax authorities often hold other companies in the supply chain liable. The allegation that a company "should have known" about a particular VAT fraud is one argument, which is readily asserted by the tax authorities against affected companies, in an effort to deny them input VAT deduction or zero-rating for cross-border supplies or even both. However, a number of recent decisions provide some degree of assistance: The German Federal Fiscal Court has now decided that the simple non-payment of VAT is not sufficient for the purposes of establishing the existence of VAT fraud. The Fiscal Court of Berlin-Brandenburg wants to establish a strict understanding of the term “supply chain“ and is referring questions concerning this issue to the European Court of Justice. The Fiscal Court of Hessian recently obliged a tax office to pay out input VAT amounts by way of interim relief, in a case where the tax office's accusations were unsubstantiated.
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