Current jurisprudence indicates partial simplifications regarding invoice details. However, a fundamental departure from the formal requirements for input deduction is not to be derived from this. As such, it is necessary to check invoices thoroughly and carefully.
Current ECJ case law
The starting point for the recent development concerning invoice deficiencies and input taxation is, in particular, two decisions of the European Court of Justice (ECJ) which have addressed
- inaccurate accounting on the one hand, and
- the retroactivity of an invoice adjustment on the other.
The result is that the ECJ has allowed the deduction of input tax, in spite of inaccurate invoice details, particularly as a result of documentation provided in addition and information on the performance period. In the decision on the retroactivity of an invoice adjustment, the ECJ has also allowed retroactive effect despite the later addition of the VAT ID number.
BMF VAT regulations
The Austrian Federal Ministry of Finance (BMF) has also responded to the decisions. In the VAT regulations (UStR 2000),
- formal requirements of an invoice (invoice features) have been partially relaxed, along with
- the provisions concerning the time of input tax deduction.
It should be noted, however, that these simplifications may have a very narrow range of application, despite some noticeable easing.
Invoice details in Austria
A potential later addition to the (retroactive) input tax deduction will only be accepted for the “Performance description” and “Performance period” details if these have been inadequately satisfied but can be ascertained on the basis of further documents.
Retroactivity of an invoice adjustment
As regards the retroactive effect of an invoice adjustment, the VAT regulations merely state that an adjustment should be possible in the course of an audit by the financial authorities, with said audit comprising both back office and field sales activities. As such and in the view of the BMF, the retroactive invoice adjustment remains limited to cases in which the financial authorities identify problems with an invoice and allows an adjustment to be made. This means that it is still not possible to adjust invoices automatically and voluntarily (e.g. if problems with an invoice are noticed when preparing the accounts) (see below).
Change in law in Austria
This view has also since been reflected in some decisions in Austria.
Retroactive invoice adjustment also allowed before the BFG
With its decision of 1 June 2017 (RV/2100294/2015), the Federal Finance Court (Bundesfinanzgericht, BFG) upheld an appeal in which the taxpayer submitted adjusted invoices as part of an appeal against a decision regarding the reimbursement of input tax. In its decision and referring to decisions by the ECJ of 15 September 2016 (case no. C-516/14, Barlis 06, RS1216655, subsection 43 and case no. C 518/14, Senatex GmbH), the BFG decided that the retroactive effect of an invoice adjustment should not only be applicable to cases of an external audit but that it must also be possible to make corrections during the appeal proceedings.
Resubmissions for “Performance description” and “Performance period” before the BFG
In another decision of the BFG of 9 May 2017 (RV/7102673/2013), the BFG had to decide on the subsequent specification of the “Performance description” and “Performance period” invoice details. Referring to the decision of the ECJ of 15 September 2016 (case no. C 518/14, Senatex GmbH) and Sec. 270 of the Federal Fiscal Code (BAO), the BFG came to the decision that the resubmission of missing invoice details before the administrative court also enables input tax to be deducted retrospectively.
In a nutshell: continue to pay close attention to invoice details!
- From a practical point of view, it is important to ensure that all invoice features are provided in full, as the possible cases of recognition and a retroactivity of the input tax deduction are not unlimited, from today’s perspective.
- Narrow application of the simplifications from rulings must also be expected in the future.
- Deficient invoices will continue to result in unpleasant discussions during company audits and other similar audits.
If you have questions about the current invoice details in Austria