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: November 21, 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.

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ECJ Cases Decided

• C-78/02, C-79/02, C-80/02 (Karageorgou & others) – VAT incorrectly paid by a non-taxable person and stated on the invoice drawn up by him
• C-566/07 (Stadeco) – Right to recover if VAT paid in error, if no danger of a loss of tax
• C-572/11 (Menidzherski biznes reshenia) – No VAT deduction if transaction did not take place
• C-642/11 (Stroy trans) – VAT mentioned on an invoice is due to the tax authorities even if transaction does not exist
• C-643/11 (LVK) – VAT is due whether or not a taxable transaction has actually been performed
• C-138/12 (Rusedespred OOD) – Neutrality principle – Refund to the supplier of tax paid where the recipient under an exempt transaction is refused a right of deduction
• C-272/13 (Equoland) – VAT exemption on imports to be subject to the condition that the imported goods are actually stored in a tax warehouse
• C-712/17 (EN.SA Srl) – Refusal of deduction of input tax and VAT zero-rate in case of fictitious actions
• C-48/20 (P) – Input VAT recovery relating to unduly invoiced VAT
• C-235/21 (RAIFFEISEN LEASING) – A written contract may exceptionally be regarded as an invoice
• C-378/21 (P GmbH) – No VAT liability in case wrongly charged VAT for B2C transactions
• C-442/22 (P Sp. z o.o.) – Employee who issued empty invoice is responsible to report them
• C-640/23 (Greentech) – VAT deductions denied if VAT is not due but taxpayers can claim refunds directly
• C-794/23 (Finanzamt Österreich) – Taxpayer not liable for incorrectly charged VAT to non-taxables
• C-101/24 ( XYRALITY) – German developer is not liable for VAT on services via an app store

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Pending ECJ Cases

• General Court T-638/24 (D GmbH) – AG Opinion – VAT on Intra-Community Acquisitions Not Precluded by Errors – VATupdate

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Briefing documents & Podcasts

C-442/22 (P Sp. z o.o.) – Employee who issued empty invoice is responsible to report them – VATupdate

C-640/23 (Greentech) – VAT deductions denied if VAT is not due but taxpayers can claim refunds directly

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

C-101/24 (XYRALITY) – German developer is not liable for VAT on services via an app store

 

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