Right to deduction - Incorrect description of the goods on the invoices
The tax authorities may not refuse a taxpayer the right to deduct input VAT on the sole ground that the purchase invoices contain an error relating to the identification of the goods which are covered by the transactions. Penalizing the taxpayer's failure to comply with formal conditions by refusing the right of deduction goes beyond what is necessary to achieve the objective of ensuring the correct application of the VAT neutrality principle. The authorities must also take into account the additional information and documents provided by that taxable person in order to assess whether the substantive conditions for the VAT deduction are met.
Furthermore, it is not necessary for the taxable person to issue an amending document to correct the mistake, nor to request corrective invoices from his supplier as long as he provides the tax authorities with the explanations and documents necessary to determine the actual purpose of the transactions (13/12/2018, C-491/18).
Supply chain with transport under an excise duty suspension arrangement
In a chain of successive transactions which gives rise only to a single intra-EU transport of excise goods under an excise duty suspension arrangement, the acquisition carried out by the trader liable for payment of the excise duty in the Member State of destination may not be classified as an intra-EU acquisition subject to VAT, where that transport cannot be ascribed to that acquisition.
The ascription of the transport to one or other acquisition in a chain of successive acquisitions depends on a temporal criterion, in that it focuses on the person to whom the right to dispose of property as owner has been transferred to at the time when the EU transport starts (19/12/2018, C-414/17).
Share disposal transaction, envisaged but not carried out
A share disposal transaction for which the direct and exclusive reason does not lie in the taxable economic activity of the company concerned, or which does not constitute the direct, permanent and necessary extension of that economic activity, does not come within the scope of VAT. It follows that the VAT relating to the disputed services is not deductible.
According to the Court, this is valid even if the intended sale was not completed. In that context, the important point is the fact that, had that sale been completed, the expenditure incurred in relation to the disputed services would not, in any event, have come within the scope of VAT and, therefore, could not have given rise to a right to deduct (08/11/2018, C-502/17).
Entry into force of the threshold for e-services
The 10,000 € threshold for e-services entered into force on 01/01/2019.
In principle, the place of supply of telecommunications, broadcasting and electronically supplied services to non-taxable persons is in the Member State of the customer. However, as from 01/01/2019, the place of supply may be in the Member State of the supplier where notably these supplies do not exceed 10,000 € (excl. VAT) in the current and the preceding calendar year. Where that new threshold is not exceeded the mini One Stop Shop (MOSS) may not be used.
VAT treatment of vouchers
EU Member States had to transpose Directive 2016/1065, which introduced new rules in relation to the issuance, transfer and redemption of vouchers. The new provisions mainly distinguish two types of vouchers: the single-purpose vouchers (SPV: VAT becomes due upon the issuance or the subsequent supply) and the multi-purpose vouchers (MPV: VAT becomes due upon the supply of goods or services of which payment is done through the redemption of the voucher).
Consignment stocks
In 2017, the German Federal Ministry of Finance published a decree introducing a simplified regime for consignments stocks, under which those had to be regarded as direct intra-EU supplies from the Member State of dispatch if specific conditions were met (see our VAT News No 8/2017).
A transitional period was however applicable until the end of 2018. This transitional period has recently been extended until the end of 2019, due to the expected entry into
VAT rate on accommodation
As of 01/01/2019, the reduced VAT rate of 10% (instead of the standard rate of 20%) is applicable to accommodation services (hotels and similar services).
Introduction of deferred payment of VAT upon importation
Bulgaria will introduce on 01/07/2019 a deferred payment of import VAT. Under conditions and for a restricted list of goods only, the taxpayers shall report the import VAT in their periodical VAT returns (at the same time as the deductible VAT, in accordance with their right to deduction).
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