On November 11, 2021, the ECJ issued its decision in the case C-281/20 (Ferimet, S. L.) – Decision – No Input VAT deduction for self-invoice with reverse charge VAT with fictitious supplier.
The court case develops an interesting argumentation on the Right to Deduct VAT, and more specifically when there is a suspicion that fraud is involved.
In a series of newsitems, we will highlight some interesting obeservations from the decision of the Court.
- Part 1 dealt with regard to the Formal vs. Material requirements of the Right to deduct VAT.
- Part 2: ”naming” and ” status” of the supplier, formal or material condition for the right to deduct VAT
- Part 3: For the application of art. 199(1), no invoice is required to deduct the VAT
- Part 4: Neutrality principle, Substance over Form and the Right to deduct VAT
Responsibilities Tax Authorities and Taxable Person
- The tax authorities cannot restrict themselves to examining the invoice itself. They must also take account of the additional information provided by the taxable person (Barlis 06 – Investimentos Imobiliários e Turísticos, C‑516/14, paragraph 44).
- Secondly, it is for the taxable person seeking deduction of VAT to establish that he or she meets the conditions for eligibility (Vădan, C‑664/16, paragraph 43).
- The tax authorities may thus require the taxable person to produce the evidence they consider necessary for determining whether or not the deduction requested should be granted (Barlis 06 – Investimentos Imobiliários e Turísticos, C‑516/14, paragraph 46 and the case-law cited).
- The taxable person exercising the right to deduct VAT has, in principle, to establish that
- the supplier of the goods or services on the basis of which that right is exercised had the status of taxable person
- the goods or services were actually supplied by taxable persons for the purposes of his or her own transactions subject to VAT, in respect of which he or she has actually paid VAT. That evidence may include, inter alia, documents held by the suppliers or service providers from whom the taxable person has acquired the goods or services in respect of which he or she has paid VAT (see Vădan, C‑664/16, paragraphs 44 and 45).