- The case involves the revocation of the permission for the taxation of turnover based on received payments (Ist-Besteuerung).
- The revocation was based on the suspicion of abuse due to the non-payment of invoices by related parties.
- The court states that if a recipient of services is already entitled to deduct input tax, even if no VAT has yet been incurred by the supplier due to the permission for Ist-Besteuerung, this is not a result of abusive behavior by the parties involved, but rather a result of incorrect implementation or application of Article 167 of the VAT Directive by Germany.
- The court leaves open the question of whether the term “due” in the context of VAT law contains a temporal component and therefore must be understood to mean that the VAT must already be due from the supplier in order to be deducted as input tax by the recipient.
- The court overturns the decision of the lower court and revokes the revocation of the permission for Ist-Besteuerung.
- The costs of the proceedings are to be borne by the defendant.
Source: bundesfinanzhof.de
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
