European Court rules that reclaim of VAT charged on intercompany invoices may be refused
The question raised by Belgium was if national legislation may refuse the right to reclaim input VAT if the recipient of the services possesses incorrect invoices, even if those invoices were supplemented by additional information to prove the occurrence, nature and amount of the transactions invoiced after the refusal.
In VAT law an invoice has to meet certain requirements, such as the unit price, the price exclusive of VAT and the corresponding VAT amount at each rate, as well as any exemptions. Consequently, the answer to the first question is that the provisions of the European VAT law must be interpreted as such that Member States may refuse the deduction of VAT to taxable persons who are recipients of services and are in possession of incomplete invoices, even if those invoices are supplemented by additional information that might prove the occurrence, nature and amount of the transactions invoiced after the refusal of the reclaim.
As it was afterwards proven that the services were actually performed the VAT was payable by the service provider. In this European Case the service provider and the recipient of the service were part of the same group. This judgment emphasizes again that also in relation to inter company transactions invoices need to be issued that meet the legal requirements.
Case C‑271/12, 8 May 2013