Input VAT May Remain Deductible Despite a Defective Invoice

Summary

An invoice that omits required information, such as the date or period of supply, is formally defective under Austrian VAT law. Nevertheless, a formal defect does not automatically remove the customer’s right to deduct input VAT where the substantive conditions for deduction can be established reliably.
The taxable person may use other evidence to demonstrate that the transaction occurred and that the substantive requirements are satisfied. Relevant evidence can include contracts, purchase orders, delivery records, acceptance documents, correspondence, time sheets, payment records and other materials linking the invoice to an identifiable supply.
The ruling does not make invoice requirements optional. Businesses should continue to obtain corrected invoices whenever possible and retain independent evidence of the supply. If the additional records do not establish the supplier, customer, nature, timing and business use of the transaction, deduction may still be denied.

Article

In its decision of 11 June 2026, case Ra 2026/13/0071-5, the Austrian Supreme Administrative Court considered whether a business could deduct input VAT on the basis of a formally defective invoice.

Sections 11 and 12 of the Austrian VAT Act set out the information required on an invoice and the conditions governing input-tax deduction. The date or period during which goods or services were supplied is generally a mandatory invoice element. An invoice lacking this information is formally incomplete.

The Court confirmed, however, that a formal invoice defect does not automatically result in the permanent loss of input VAT. The substantive conditions of the deduction remain central. Where the tax authority has the information needed to verify that an actual taxable supply was made by a taxable person to the business claiming the deduction, the claim cannot be rejected solely because an invoice requirement was not satisfied.

Other records may therefore supplement the invoice. These could include the underlying contract, order documentation, proof of delivery, service reports, acceptance certificates, correspondence, payment evidence or accounting records. Together, the documents must allow the transaction and its relevant VAT elements to be verified.

This principle should not be interpreted as removing the need for invoice controls. Where key facts cannot be established, or where the documents contain contradictions, the input-tax deduction can still be denied. The result will also differ where there are objective indications of fraud or abuse.

From a compliance perspective, businesses should operate a two-stage process. First, accounts-payable controls should identify missing or incorrect invoice elements and request a supplier-issued correction. Second, the supporting transaction file should preserve sufficient evidence of the underlying supply independently of the invoice.

This is especially important for high-value services, milestone payments, construction projects, long-running consultancy engagements and transactions invoiced significantly after completion. Automated invoice validation can identify formal deficiencies, but it should not replace the collection and retention of substantive evidence.

The decision reinforces the importance of substance while preserving the practical role of a compliant VAT invoice.

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