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JPA Tax Club London 22 th June 2017 Invoice correction in JPA countries

This presentation discusses the ECJ Senatex case and its implications on invoice correction in JPA countries, focusing on the principles of input VAT deduction and neutrality. It also compares the invoice correction practices in different JPA countries and raises open questions.

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JPA Tax Club London 22 th June 2017 Invoice correction in JPA countries

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  1. JPA Tax Club London 22th June 2017 Invoice correction in JPA countries Dr. iur. Klaus Fiebichfk@fiebich.comTel.: +43 316 324453-11

  2. Contents • Summary ECJ, 15.09.2016 – C-518/14 – Senatex • Considerations • Input VAT deduction as fundamental principle • Principle of neutrality • Substantive conditions vs. formal conditions • Open questions • Comparison invoice correction in JPA countries • Discussion

  3. ECJ, Senatex – Considerations I • Right to deduct input VAT… • …immediatelyis a fundamental principle • …must be exercised in respect of the period during which the right has arisen and the taxable person is in possession of an invoice (even if this invoice is not – yet – fully correct) • Invoice correction with retroactive effect (ex tunc) • No VAT deduction without an invoice (compare ECJ, 29.04.2004 – C-152/02 – Terra Baubedarf-Handel) • Interest for late payment is contrary to the principle of neutrality • Member states have power to lay down penalties for failure to comply with formal conditions for the exercise of the right of deduct VAT. • Member states can adopt measures to ensure the correct collection of VAT and to prevent evasion. E.g.: Financial penalty proportionate to seriousness of the offence

  4. ECJ, Senatex – Considerations II • No formalism Right to deduct arises when substantive conditions are met, even if the taxable persons have failed to comply with some formal conditions. • Substantive condition • The person concerned must be a taxable person within the meaning of the VAT directive. • The goods or services relied on to give entitlement to the right of deduction must be used by the taxable person for the purposes of his own taxed output transactions and those goods or services must be supplied by another taxable person as inputs. • Formal condition • Proper invoice (e.g.: VAT number of the supplier)

  5. ECJ, Senatex – Open questions • No comment on the question as to when an invoice needs to be corrected. • Cancellation + invoicing a new invoice = Correction? • Possible problem Argumentation of fiscal authority same situation as Terra Baubedarf-Handel (no invoice = no VAT deduction)

  6. Comparison JPA countries I

  7. Comparison JPA countries II

  8. Comparison JPA countries III

  9. Comparison JPA countries IV

  10. Comparison JPA countries V

  11. Comparison JPA countries VI

  12. Comparison JPA countries VII

  13. Comparison JPA countries VIII

  14. Discussion • Is the current legal situation in your country in conformity with this ECJ jurisdiction?

  15. Sources • ECJ, 15.09.2016 – C-518/14 – Senatex: http://curia.europa.eu/juris/document/document.jsf;jsessionid=9ea7d2dc30d53fdf6388bafd4abe84a0cca08b2318ce.e34KaxiLc3qMb40Rch0SaxyKc350?text=&docid=183365&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=469199 • ECJ, 29.04.2004 – C-152/02 – Terra Baubedarf-Handel: http://curia.europa.eu/juris/showPdf.jsf?text=&docid=49128&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=504855 • VAT Newsletter 27/2016, Dr. Stefan Maunz http://www.kmlz.de/sites/default/files/VAT%20Newsletter%2027_2016.pdf

  16. Thank you for your attention! This presentation was created solely for training purposes. We take no responsibility for any action done or missed out of this presentation.The explanations given are naturally of a general kind and can only give a survey over the legal situation and knowledge at that point of time.This is not meant to replace a professional consulting.

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