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8 December 20222 minute read

Country-specific updates: Germany

German Federal Tax Court rules that an invoice issued without the correct VAT amount cannot be corrected retrospectively

In its recently published judgment (Judgment of 7 July 2022, V R 33/20) the German Federal Tax Court held that invoices cannot be amended retrospectively and that the plaintiff is not entitled to deduct the input VAT charged upon the corrected invoice.

The plaintiff was a company originally incorporated under Luxembourg law. In 2016 it was converted into a German GmbH, but its registered office remained in Luxembourg. The plaintiff received services from entities established in Germany. The relevant invoices were issued with 0% VAT as, based on the registered office of the company, the suppliers assumed that the place of supply for those services was Luxembourg.

During a tax audit, it was established that the plaintiff’s place of management was Germany, and that the service provided were therefore subject to 19% German VAT. The invoices were then corrected, but the plaintiff was subsequently denied the recovery of the relevant input VAT.

The German Federal Tax Court held that invoices cannot be amended retrospectively if the original invoice did not include VAT in the first place. The German Federal Tax Court distinguished from the Court of Justice of the European Union (“CJEU”) case law in Senatex, arguing that the plaintiff had not paid any (domestic) VAT and had not submitted any advance VAT filings in the year in dispute and was not registered for VAT in Germany that year.

Comment: This judgment is thus in line with the strict approach of the German Federal Tax Court in regard to retroactive corrections of invoices. However, the respective invoices not only corresponded to the characteristics prescribed by the CJEU, it also contained the minimum information required by German tax law. Therefore,  a different outcome could be reached if the case was referred to the CJEU.

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