Romania: Cancellation and reissuance of invoice, no implications for VAT refund period (CJEU judgment)

A case concerning cancellation and reissuance of invoice on VAT refund period for claiming an input VAT deduction

Cancellation and reissuance of invoice, no implications for VAT refund period

The Court of Justice of the European Union (CJEU) held that the correction and reissuance of an invoice had no effect on the refund period for claiming an input value added tax (VAT) deduction.

The case is: Wilo Salmson France, C-80/20 (21 October 2021)

Background

A French company in 2012 purchased tooling located in Romania and filed a VAT refund claim for 2012. This VAT refund application was denied by Romanian tax authorities, on a finding of incorrect invoices. The French company did not file any appeal against this decision.

In 2015, a supplier cancelled the original invoices and issued new ones. Based on these new invoices, the company filed a new VAT refund claim for 2015. Again, the Romanian tax authorities denied this application finding that the VAT had already been claimed. The company appealed, and eventually a Romanian court referred the case to the CJEU.

CJEU judgment

According to the CJEU:

  • The right to deduct input VAT arises when the VAT liability with respect to the VAT that is deductible arises, whereas in order to claim the input VAT deduction (and VAT refund) the taxable person must possess an invoice issued in accordance with the EU VAT Directive.
  • A document cannot be regarded as an invoice in accordance with the EU VAT Directive if it fails to include information allowing the tax authorities to make a determination necessary for the approval of the VAT refund application—i.e., an incomplete document cannot be automatically denied.
  • For VAT refund purposes, it is crucial when the taxable person obtained the invoice issued in accordance with the EU VAT Directive, that the VAT refund application for a particular period cannot be denied only on the ground that the VAT liability arose in previous refund period but, however, the invoice was issued in that particular period.
  • If the original invoices are treated as invoices issued in accordance with the EU VAT Directive, their cancellation and reissuance by the supplier (without any valid reason after being rejected by the tax authorities with regard to a VAT refund claim based on these invoices) does not affect the right for a VAT refund that was already claimed or the period for which the right is to be claimed.

Read a November 2021 report prepared by the KPMG member firm in Slovakia

 

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