VATupdate

Flashback on ECJ cases – C-588/10 (Kraft Foods Polska SA) – Price reduced after the supply has taken place, acknowledgment of receipt of correcting invoice

Source Curia

On Jan 26, 2012, The ECJ decided the case C-588/10 (Kraft Foods Polska SA) related to Price reductions after the supply has taken place, acknowledgment of receipt of correcting invoice.

Decision

The requirement that, in order to be entitled to reduce the taxable amount as set out in the initial invoice, the taxable person must be in possession of acknowledgment of receipt of a correcting invoice by the purchaser of the goods or services constitutes a condition for the purpose Article 90(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax.

The principles of the neutrality of value added tax and proportionality do not, in principle, preclude such a requirement. However, where it is impossible or excessively difficult for the taxable person who is a supplier of goods or services to obtain such acknowledgment of receipt within a reasonable period of time, he cannot be denied the opportunity of establishing, by other means, before the national tax authorities of the Member State concerned, first, that he has taken all the steps necessary in the circumstances of the case to satisfy himself that the purchaser of the goods or services is in possession of the correcting invoice and is aware of it and, second, that the transaction in question was in fact carried out in accordance with the conditions set out in the correcting invoice.

Background

A requirement that the reduction of the taxable amount, as determined in an original invoice, is conditional upon the taxable person being in possession of a confirmation of receipt of the corrective invoice by the purchaser of the goods or services. the concept of ‘condition’ referred to in Article 90 (1) of the VAT Directive.

The principle of VAT neutrality and the principle of proportionality do not in principle preclude such a requirement. However, if it turns out that it is impossible or excessively difficult for the taxable person – as a supplier of goods or services – to obtain such acknowledgment of receipt within a reasonable time, he cannot be denied the possibility of making any other means in relation to the national tax authorities. to provide evidence, on the one hand, that he has – in the specific circumstances of the case – made the necessary efforts to ensure that the recipient of the goods or services has received and taken note of the corrective invoice, and on the other hand,

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