Administrative Court rules on Correction of Error request related to overpayment of VAT later assessed in another EU MS

The Cyprus Administrative Court recently held that a Correction of Error request to the Value Added Tax (VAT) authorities cannot be approved for claiming allegedly overpaid VAT in Cyprus, later assessed and settled in another European Union (EU) Member State. It was held that the correction process needs to be completed within three years from the payment of VAT and the taxpayer could not subsequently invoke double taxation in Germany to request back VAT already paid in Cyprus.

The fact that the taxpayer at the VAT registration timing considered the place of its transactions (business establishment) in Cyprus charging Cypriot VAT to its consumers and confirming such approach via a VAT Ruling was inadequate when the German VAT authorities assessed German VAT on the basis that the services were predominantly carried out from a German fixed establishment.

Source EY

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