EUROPEAN COURT OF JUSTICE
VAT Deduction after Tax Authorities’ Assessment (12/04/2018 C-8/17 & 26/04/2018 C-81/17)
Where, following a tax adjustment, additional VAT was paid to the Treasury and was the subject of documents rectifying the initial invoices several years after the supply, Member States may not deny the right to deduct VAT on the ground that the regulatory period laid down for the exercise of that right has expired. (C-8/17)
Member States may not disallow a taxable person to correct VAT returns, although such correction can be made by Tax Authorities, on the sole ground that the correction relates to a period that has already been be subjected to a tax inspection. (C-81/17)
These case-law are very significant and show that taxable persons can still recover input VAT after the statutory period of limitation if they were unable to do it within the ordinary deadline as a result of a tax assessment. Should you be placed in such a situation please feel free to contact us. We will evaluate your entitlement to obtain a VAT refund.
Simplified Triangulation Scheme (19/04/2018, C-580/16)
The Simplified Scheme for Triangulation is applicable even if B is resident and registered for VAT purpose in the Member State of departure, where B uses the VAT identification number of another Member State. Additionally, that scheme is applicable even in the case B has not submitted its Intra-EU Listing in due time.
Some EU countries have refused the application of the above-mentioned simplified scheme if B was registered in the country of departure. With that judgement, the ECJ discards this restrictive approach adopted by various National Tax Authorities in regards to the use of the simplified scheme for triangulation supplies.
Real-Time VAT Reporting
As of 01/07/2018, invoices with a VAT amount exceeding HUF 100,000 (+/- € 320) must be reported to the Hungarian tax authorities via a real-time online plat-form. That is applicable to all supplies made by taxable persons, established or not in Hungary, to taxable persons registered for VAT in purposes in Hungary where a VAT amount is or must be charged on the invoice. At this stage, B2C supplies are not concerned by this online reporting system. Invoices must be reported within 1 day or 5 days depending on the invoicing form and the VAT amount involved.
After Spain (“SII”) Hungary implements a system of real-time VAT reporting with very strict deadlines.
Supplies (B2B & B2C) will be subject to an e-invoicing obligation as from 01/01/2019. The legislation set forth the e-invoicing obligation for all domestic transactions performed between persons established/residents in Italy including VAT-registered non-established taxable persons. However, the EU Council Decision 2018/593 of 16 /04/2018 authorizes Italy to introduce mandatory e-invoicing only for invoices issued by taxable persons established in Italy. In practice, the e-invoice must only be provided using the Interchange System (Sistema di Interscambio – SDI) managed by the Italian Tax Authorities.
Introduction of VAT Grouping
The Government has decided to implement the VAT group regime in its national legislation as an alternative road to the interpretation of the European Court of Justice on cost-sharing organisation. The judgment of the Court ruled that the VAT exemption is not applicable to financial and insurance activities. The VAT group regime should be effective as from 31/07/2018.