In order to claim a VAT deduction, the substantive conditions must first and foremost be met. The right to deduct VAT is so fundamental to the VAT system that formal defects in the invoice must not limit the deduction. The Court of Justice (CJEU) recently reaffirmed this.
Incomplete VAT invoice
In our article Deduction allowed despite an incomplete VAT invoice We described the Senatex judgment handed down in 2016. In a recent judgment in two German affairs the ECJ upholds this ruling.
One case concerns the German car dealer RGEX GmbH. In its VAT returns, the company deducts approximately €2 million in VAT from invoices it receives from EXTEL. EXTEL states its VAT registration number and its PO box on these invoices. The German tax authorities refuse to allow the deduction. This is because German law requires the supplier to state on the VAT invoice the address at which they carry out their economic activities.
The other case concerns purchases from an online retailer, who also states his PO box address because he delivers the vehicles to public places, such as station forecourts.
The requirement that the invoice must state the name, address and VAT registration number of the supplier is intended to enable the tax authorities to verify whether the VAT for which a deduction is claimed has been paid. It also enables the business deducting the VAT to check whether the supplier is a VAT-registered business. However, according to the Court of Justice, for either of these purposes it is not necessary for the invoice to state the address of the place of business.
VAT invoices under Dutch law
Dutch law does not require the invoice to state the address of the business premises of the supplier. However, the Dutch Tax and Customs Administration takes the view that simply stating a PO box is not sufficient. Recently, the State Secretary for Finance issued an amended decision in line with the judgments of the Court of Justice. In doing so, it has adopted the principle that the substantive requirements for VAT deduction are decisive. A VAT-registered business claiming VAT deduction would therefore be well advised to keep a close eye on these substantive requirements.