The plaintiff had paid invoices to his (Danish) supplier of mobile phones for the purchase of goods which were wrongly charged with Danish VAT by the supplier. It was undisputed that the VAT place of delivery for the goods was not Denmark, but country Y1 and country Y2, where the plaintiff had collected the goods, and that the VAT had therefore been wrongly invoiced. The supplier had subsequently gone bankrupt, which is why the plaintiff could not get the VAT refunded from the supplier. The supplier had not paid the VAT to the tax authorities.
The case primarily concerned whether the plaintiff had the right to deduct the wrongfully invoiced Danish VAT. In the second instance, the case concerned whether the plaintiff was entitled to a refund of the VAT from the tax authorities under the present circumstances.
Vestre Landsret found that the VAT was not deductible according to Section 37, subsection of the VAT Act. 1, and the underlying provision in Article 168 of the VAT system directive, as the directive provision has been interpreted in the established practice of the European Court of Justice regarding the right to deduct VAT that has been wrongly invoiced.
Vestre Landsret further noted, with reference to a number of judgments from the Court of Justice in cases concerning a customer’s right to reimbursement of wrongly invoiced VAT, which in the cases had and had not been paid to the tax authorities respectively, that there is no support in the Court’s practice for , that it follows from the efficiency principle that a buyer of a product or service, whose supplier, in disregard of the rules in the VAT system directive, has wrongly invoiced VAT on the supply, can claim this VAT refunded by the tax authorities, when the VAT has not been paid to the treasury by the supplier.
The Ministry of Taxation was then acquitted of the claimant’s claims regarding the right to deduct and, secondly, claims for repayment of the Danish VAT paid by the claimant to the supplier.
Source: skat.dk
