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Flashback on ECJ cases – C-516/14 (Barlis) – Vague description of the services and the dates may not lead to refusal of VAT deduction

In this flashback we focus on the Barlis Case, which deals with the VAT invoicing requirements, more specifically on the description on the invoice.

Judgment

Article 226 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that invoices mentioning only ‘legal services rendered from [a date] until the present date’, such as those at issue in the main proceedings, do not a priori comply with the requirements of point 6 of that article and that invoices mentioning only ‘legal services rendered until the present date’ do not a priori comply either with the requirements of point 6 or with those of point 7 of that article, which is, however, for the referring tribunal to ascertain.

Article 178(a) of Directive 2006/112 must be interpreted as precluding the national tax authorities from refusing the right to deduct value added tax solely because the taxable person holds an invoice which does not satisfy the conditions required by Article 226(6) and (7) of that directive, even though those authorities have available all the necessary information for ascertaining whether the substantive conditions for the exercise of that right are satisfied.

Summary of the facts

The Portuguese company Barlis runs hotels with restaurants. She purchased certain legal services. Therefore, the law firm issued invoices documenting these services, which briefly indicated the description of the services performed – such as: “legal services performed to date” or “fees for legal services rendered from June to present day”. The tax authority found such descriptions insufficient. Consequently, he refused the right to deduct input tax from those invoices.

Decision

The ECJ rules that Barlis could deduct the VAT on the invoice which did not contain all of the details required under VAT law, if and as far as the tax authorities can derive from the invoice all the informationnecessary for ascertaining whether the substantive conditions for VAT deduction had been met.

Source curia

Note: To avoid disputes with the tax authorities and delays in obtaining a recovery of input VAT it is still important to ensure that the invoices, both received and issued, are in compliance with legislative and regulatory requirements, including a clear description of the goods or services supplied.

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Specific country measures as result of the ECJ case

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