Application of ECJ Case C-378/21 (P-GmbH): Significance of Good Faith in EU VAT Directive

• The ECJ case P-GmbH limited the scope of Art. 203 of the EU VAT Directive.
• If there is no risk of a VAT loss, a VAT liability does not arise.
• The plaintiff charged VAT on invoices for postal services, but later the tax office recognized them as VAT exempt.
• The Fiscal Court Cologne upheld the lawsuit and recognized the plaintiff’s services as VAT exempt.
• Sec. 14c para. 1 of the German VAT Act / Art. 203 of the EU VAT Directive does not apply if there is no risk of a VAT loss.
• The majority of the invoices were issued to persons not entitled to claim input VAT deduction.
• The court followed the principles of the P-GmbH case.

Source: kmlz.de

See also C-378/21 (P GmbH) – Judgment – No VAT liability in case wrongly charged VAT for B2C transactions

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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.

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