Tax Alert 1/2012Judgment of the Court of Justice of the European Union in case C588/10 (Kraft Food Polska): receipt of a correcting invoice |
On 26th January, the EU Court of Justice (the "Court") issued a long-awaited judgment regarding the requirement to obtain a confirmation that the buyer has received a correcting invoice for the purpose of VAT reduction.
The Court confirmed that the requirement to obtain a confirmation that the buyer has received a correcting invoice does not breach the EU law.
At the same time, the Court addressed cases when obtaining of such a confirmation allowing output VAT reduction within a reasonable deadline is impossible or impracticable. In such a case, tax authorities should allow the supplier documenting its due care in making sure that the buyer has received the correcting invoice and accepted it, and that the transaction has been actually concluded on terms indicated in the correcting invoice.
In the rationale the Court indicated that the evidence may include e.g. copies of the correcting invoice, reminder notes addressed to the buyer of goods and services regarding the receipt confirmation, payment slips or accounting vouchers allowing determining the amount actually paid to the supplier. In practice, the evidence may be much broader.
Therefore, the judgment provides an opportunity to apply a certain procedure when confirmation of correcting invoice receipt is difficult to obtain. In our opinion, the judgment may be effective for past periods as well. In light of the position taken by the Court, interested parties should make sure that the taxpayer acted with due care in each specific case. In controversial cases, obtaining of a tax ruling to support the position should be considered.
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