EUROPEAN COURT OF JUSTICE (C-564-15, 26/04/2017)
Reverse charge – Undue payment of VAT by the purchaser to the seller – Right of deduction
The VAT Authorities may deny the right of deduction when VAT is not due, on the basis of an invoice including VAT where the said VAT is paid by the seller if the reverse charge mechanism is applicable.
However, to the extent that reimbursement of the unduly invoiced VAT by the seller to the purchaser proves to be impossible or excessively difficult, in particular in the case of the seller insolvency, the purchaser should be allowed to apply for reimbursement directly to the Tax Authorities.
Additionally, the principle of proportionality precludes Tax Authorities from imposing on the purchaser having paid VAT (instead of applying reverse charge) a tax penalty of 50% of the amount of value added tax, where those Authorities suffered no loss of VAT revenue and there is no evidence of tax evasion.
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