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Roadtrip through ECJ Cases – Focus on “Liability to pay VAT – VAT shall be payable by any person who enters the VAT on an invoice” (Art. 203)

Last update: August 4, 2025

Article in the EU VAT Directive 2006/112/EC

Article 203
VAT shall be payable by any person who enters the VAT on an invoice.

⚖️ Importance

  • Liability Based on Invoicing, Not Substance Even if a transaction is not subject to VAT, if someone issues an invoice that includes VAT, they are liable to pay that VAT to the tax authorities. This prevents fraudulent or careless invoicing from creating tax revenue losses.
  • Protects Tax Revenue It ensures that VAT amounts shown on invoices are not used to claim unjustified deductions or refunds, especially by recipients who might not be entitled to deduct VAT.
  • Encourages Accurate Invoicing Businesses must be diligent when issuing invoices. Incorrectly charging VAT can lead to financial liability, even if the underlying transaction was exempt or outside the scope of VAT.
  • Supports VAT Neutrality By enforcing liability for incorrectly invoiced VAT, Article 203 helps maintain the neutrality of the VAT system, ensuring that only legitimate VAT flows through the system.

ECJ Cases Decided


Pending ECJ Cases

  • None

Briefing documents & Podcasts

C-794/23: Indoor playground operator does not owe VAT for incorrect invoices



 

 

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