The fiscal legislation introduces a new approach in the matter of the right of VAT deduction.\u00a0Though this right should be recognized by the control bodies if, primarily, the substantive\u00a0conditions are met, meaning that the purchases are real and designed to achieve taxable\u00a0transactions, and even if the conditions of form are not fully met.<\/p>\n
This new approach is the result of introducing in in the Fiscal Code of the jurisprudence in the\u00a0VAT matter of the Court of Justice of the European Union.<\/p>\n
Therefore, if the fiscal authorities have at their disposal enough information to establish that\u00a0the substantive requirements are met, namely that the acquisition is real, they cannot impose\u00a0additional formal conditions that may void the right of deduction.<\/p>\n
So far, there have been numerous situations when due to the formal conditions, the right of\u00a0deduction was voided.<\/p>\n
For example, the right of deduction was not recognized by the tax authorities if the bills were\u00a0issued by a supplier whose VAT code had been canceled.<\/p>\n
Attention The provisions of Article 11 are very important in this context: the tax authorities\u00a0may not take into consideration a transaction that does not have an economic purpose, may\u00a0adjust tax effects thereof, or reclassify the form of transactions \/ activities to reflect economic\u00a0content of the transaction \/ activity.<\/p>\n
This article, also, provides that the tax authorities are obliged to motivate their decision in\u00a0fact, in such situations, and, also, provides that in the matter of VAT and excise duties, the tax\u00a0authorities must take into account the jurisprudence of the Court of Justice of the European\u00a0Union. Therefore, the tax authorities may cancel the right of deduction, if it has been\u00a0improperly exercised, namely whether:<\/p>\n
\uf0b7 the transactions concerned, notwithstanding formal application of the conditions\u00a0provided by legal provisions, have the result of guaranteeing of tax advantages that\u00a0would defeat the purpose of those legal provisions;<\/p>\n
\uf0b7 it must be proven, objectively, that the essential aim of the transactions concerned is to\u00a0obtain a tax advantage<\/p>\n
In this context, is the right of deduction guaranteed even if the supplier is inactive?<\/p>\n
Case C-277\/14 PPUH<\/p>\n
In this cause, the Polish tax authorities have not recognized the right of deduction because the\u00a0purchases invoices were issued by a non-existent operator (not registered for VAT purposes,\u00a0not file tax returns and not paying taxes).<\/p>\n
The Polish compan claimed that the acquisitions were made in good faith since the supplier\u00a0was registered in the Trade Register and have a tax identification number.<\/p>\n
The Court of Justice of the EU ruled that tax authorities cannot refuse the right of deduction\u00a0because the company is a taxable person, it has received and paid the goods indicated on the\u00a0invoices issued by the supplier and it used these assets in the purpose of taxable transactions.<\/p>\n
The Court found that the invoices contain enough information in order to identify the person\u00a0that issued them and the nature of the goods.<\/p>\n
The decision states that the tax administration must detect the fiscal fraud or irregularities\u00a0committed by the person who issued the invoice, without obliging the recipient to verify the\u00a0invoice.Desi autoritatile fiscale din Romania trebuie sa tina cont de jurisprudenta Uniunii\u00a0Europene atunci cand efectueaza verificarile pe TVA, o atentie sporita se acorda contextului\u00a0care a stat la baza emiterii deciziilor CJUE.<\/p>\n
In Poland, at the time of issuing this decision in the case PPUH, the company had no\u00a0possibility to make a reasonable verification of information on VAT registration of the\u00a0supplier, of the fact that it is an active person in terms of taxation, that meets its declaration\u00a0and payment obligations, as there is no database of companies that do not have a proper fiscal\u00a0conduct. So, the investigations that should have been made by PPUH to detect this\u00a0information are considered unreasonable. In contrast, in Romania there is an updated database\u00a0of the inactive tax payers. The accessing of this database, from the fiscal authorities point of\u00a0view, does not involve unreasonable costs for taxable persons registered in Romania.<\/p>\n
Consequently, even if the European jurisprudence allows VAT deduction when it is\u00a0objectively proven that a supply or a purchase is real, you should pay attention, also, to other\u00a0legal issues regarding the right of deduction. Thus, if the purchase was made with a taxpayer\u00a0who, at the acquisition date, is registered in the register of inactive taxpayers published on\u00a0ANAF website, the beneficiary is not entitled to deduct VAT on these purchases even if they\u00a0are real and were designed for taxable operations.<\/p>","protected":false},"excerpt":{"rendered":"
The fiscal legislation introduces a new approach in the matter of the right of VAT deduction.\u00a0Though this right should be recognized by the control bodies if, primarily, the substantive\u00a0conditions are met, meaning that the purchases are real and designed to achieve taxable\u00a0transactions, and even if the conditions of form are not fully met. This new […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[356,398,533],"_links":{"self":[{"href":"http:\/\/www.contexpert.ro\/en\/wp-json\/wp\/v2\/posts\/2192"}],"collection":[{"href":"http:\/\/www.contexpert.ro\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.contexpert.ro\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.contexpert.ro\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/www.contexpert.ro\/en\/wp-json\/wp\/v2\/comments?post=2192"}],"version-history":[{"count":0,"href":"http:\/\/www.contexpert.ro\/en\/wp-json\/wp\/v2\/posts\/2192\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.contexpert.ro\/en\/wp-json\/wp\/v2\/media?parent=2192"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.contexpert.ro\/en\/wp-json\/wp\/v2\/categories?post=2192"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.contexpert.ro\/en\/wp-json\/wp\/v2\/tags?post=2192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}