Keywords
Summary

Keywords

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Reverse charge procedure – Taxable person liable for value added tax as the person to whom goods or services provided – Right to deduct – Conditions – Holding of an invoice – No such condition

(Council Directive 77/388, Arts 18(1)(d), and 22(3))

Summary

Where the reverse charge procedure applies, a taxable person who is liable, as the recipient of services, for the value added tax relating thereto in accordance with Article 21(1) of the Sixth Directive 77/388, as amended by Directives 91/680 and 92/111, is not obliged to be in possession of an invoice drawn up in accordance with Article 22(3) of the Sixth Directive in order to be able to exercise his right to deduct.

Concerning the arrangements for exercising the right to deduct in cases where the reverse charge procedure applies, the only applicable provision is Article 18(1)(d) of the directive, whereby a taxable person who is liable as the recipient of services for the value added tax relating thereto has only to fulfil the formalities laid down by the Member State concerned. Whilst it is true, in that respect, that Member States must exercise the power to establish those formalities in conformity with one of the aims pursued by the directive, which is to ensure the collection of value added tax and its verification by the tax administration, and true also that an invoice has an important documentary function because it may contain verifiable data, that power may be exercised only in so far as, by the number or the technical nature of such formalities, their imposition does not make it practically impossible or excessively difficult to exercise the right to deduct.

For the tax administration, which has the information necessary to establish that the taxable person is, as the recipient of the supply in question, liable to the tax, to require as an additional condition for the right to deduct that that person be in possession of an invoice drawn up in conformity with Article 22(3) of the directive would result in a taxable person being, on the one hand, liable as the recipient of services for the value added tax in question, but, on the other hand, risking not being able to deduct that tax.

(see paras 47, 49, 51-53, operative part)