Taxation

Negative consequences of using the wrong VAT ID

By Carina Langegger and Manfred Leitinger, Prodinger & Partner

The ECJ decision issued on 22 April 2010 (Case C-539/08) regarding intra-community acquisitions between and Facet BV/Facet Trading BV showed that small formal invoicing mistakes can have significant implications for tax. The consequence of a purchaser using a VAT ID differing from the VAT ID of the country where the supply ends is that the purchaser becomes liable for VAT in both countries (where the supply ends and in the country of the VAT ID which was used). However, the right of VAT deduction would only be granted in the country where the delivery ends.

In such cases, in order to avoid penalties, the purchaser has to provide a document as proof to support the claim that acquisition tax was accounted for in the Member State where the delivery ended.

This rule also applies if the supplier uses an incorrect VAT ID. If A1 delivers goods from Austria to A2 in France and A2 uses its Austrian VAT ID, A2 becomes liable for an additional acquisition tax without the right of deduction in Austria. Documented proof that the acquisition tax was paid in France is required to avoid a VAT adjustment.

Following the interpretation by the Austrian fiscal authorities, even the mere display of an incorrect VAT ID on the invoice (even if the purchaser does not use the displayed VAT ID) is considered to be destructive. As a result, every display of the incorrect VAT ID leads to additional acquisition tax without the right of deduction.

The upshot with regards to chain/triangular transactions is that it is now even more important to monitor the compliance of formal invoicing requirements in order to avoid double taxation.


Carina Langegger
Prodinger & Partner St. Johann Steuerberatung GmbH & Co KG, St. Johann im Pongau, Austria
T: +43 641 2 40 77
E: This email address is being protected from spambots. You need JavaScript enabled to view it.; W: www.prodingerat

 



 

Manfred Leitinger
Prodinger & Partner St. Johann Steuerberatung GmbH & Co KG, St. Johann im Pongau, Austria
T: +43 641 2 40 77
E: m.leitinger@prodingerat; W: www.prodingerat

 

 

 

 


published: June 2014

GGI Logo 70x50px

GGI Geneva Group
International AG

Schaffhauserstrasse 550
P.O. Box 286
8052 Zurich
Switzerland

Contact

T: +41 44 2561818
F: +41 44 2561811
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.ggi.com