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ECJ Case C-664/16 (Vadan) – Judgment – Invoicing requirements – Right to deduct input VAT – Absence of invoices

European Court of Justice – Judgment of 21 November 2018 in case C-664/16 (Lucretiu Hadrian Vadan) regarding the deduction of input VAT where no invoice is available.

Unofficial translation

Considerations (from A-G’s opinion):

The invoice is an essential element of a taxable person’s right to deduct input VAT. Indeed, a properly drawn up invoice has been termed the ‘ticket of admission’ to the right of deduction, given that it has an ‘insurance function’ for the national fiscal authority in linking input tax deduction to the payment of tax.

In this case the question arises if the right to deduct input VAT may be refused by a national fiscal authority where the taxpayer fails to provide it with any invoices.

Facts (Simplified):

Mr Vadan is a Romanian citizen and a property developer. In his capacity as a natural person, he built a residential complex containing 90 apartments. Mr Vadan is also the owner of other plots of land in respect of which urban sectoral plans had already been drawn up for the construction of single-family homes.

At a certain moment, Mr Vadan’s turnover exceeded the VAT registration threshold. Therefore, the Romanian tax authorities registered him as taxable person. However, Vadan did not charge VAT after this VAT registration.

The Romanian tax authorities raised an assessment, arguing that Vadan had performed economic activities after he was registered for VAT. They also denied the deduction of input VAT, as Vadan did not have a sufficient VAT bookkeeping, e.g. he did not have the original purchase invoices. This specifically related also to the period prior to the VAT registration.

Vadan argued that he should be able to deduct all input VAT, also for the period prior to his VAT registration. As he did not exceed the VAT registration threshold, he was not obliged to keep a VAT bookkeeping, so he should be able to claim back the input VAT also without the purchase invoices.

The Romanian High court asked inter alia the following question to the ECJ:

May a taxable person who satisfies the substantive requirements for the deduction of VAT exercise his right to deduct in a situation where he is unable to provide evidence, by way of invoices, of input tax for the supply of goods and provision of services?

Opinion Advocate General

A-G TANCHEV delivered its opinion on 30 May 2018. The conclusion is:

A taxable person who has not retained invoices attesting to his right to deduct value added tax relative to the supply of goods or the provision of services cannot provide proof of these transactions on the basis of a report established by experts to estimate the value of building materials and labour relating to the construction of buildings. Also considering that a considerable period of time has passed since the new buildings concerned formed the subject of taxable transactions.


The ECJ follows the opinion of the AG and rules as follows.

A taxable person who is unable to prove the amount of tax VAT that it has paid upstream, by the production of invoices or any other document, can not benefit from a right to deduct VAT on the sole basis of an estimate resulting from an expert report ordered by a national jurisdiction.

Source: Curia