Input tax deduction for invoices without VAT statement

However, recipients of these services or invoices are not entitled to deduct input VAT, even if the foreign company subsequently discloses the VAT to the authorities in a report prepared during a tax audit, which cannot be equated with an invoice. Furthermore, according to the European Court of Justice (ECJ), the authorities may refuse to accept the correction of such an incorrect invoice.

Prerequisite: VAT owed and paid

The ECJ recently reaffirmed its established case law, according to which the deduction of input VAT is an integral part of the VAT system and may not be restricted as a general principle. The prerequisite for input VAT deduction is that the VAT claimed for deduction has actually been owed and paid. Input tax deduction can also be claimed if formal requirements are not fulfilled, as long as the substantive requirements for the deduction are met.

In one case, the report submitted by a company to the authorities did not meet the necessary requirements, partly because the company was named both as the supplier and the recipient of the transactions, so it could not be considered an invoice. The ECJ therefore concluded that authorities may refuse input VAT deduction if a trader fails to register, does not show VAT on the invoice, and only provides a report with VAT indicated during an audit.

Regarding invoice corrections, the ECJ confirmed that regulations excluding invoice corrections are justified to ensure proper tax collection or prevent tax evasion, provided that there is no risk to tax revenue.

Tip

If, during a tax audit in Austria, it is found that input tax was deducted based on a formally incorrect or defective invoice, the defect can be corrected within a reasonable period set by the auditor.

If the invoice is corrected within this period, the original input tax deduction must be retained. However, this retroactive procedure is not permitted in cases of an incorrect (originally too low) VAT statement; in such cases, invoice corrections are only possible for the current VAT return period.