The recent decision of the CJEU concerns treatment of improperly charged higher VAT rate
The case of the Austrian company P GmbH has once again come before the CJEU: the Court has provided further guidance on the issue of the improperly charged higher VAT rate.
P GmbH operates an indoor playground in Austria, where the majority—but not all—of its customers make use of the service as final consumers. Initially, the GmbH charged the standard Austrian VAT rate of 20% on admission fees. In 2019, it realised that the service provided was subject to the reduced VAT rate of 13%, and it corrected its VAT returns by means of self-revision. The Austrian tax authority rejected the self-revision on two grounds: first, that a correction of the VAT payable required an amendment of the invoices (which was not possible for tickets evidenced by a receipt); second, that the taxable person had already collected the higher amount of VAT in the admission price and would be unjustly enriched if it were to recover the difference from the budget. The case reached the CJEU in 2021. In its judgment of 8 December 2022 in Case C-378/21., the CJEU held that, where customers are exclusively final consumers (who cannot deduct the improperly charged VAT), there is no risk of a loss of tax revenue if the service provider subsequently adjusts the payable VAT; moreover, it is irrelevant that the service provider was enriched by charging more VAT in the admission price than was actually payable.
Following the C-378/2.1 judgment, the Austrian administrative court took the view that the turnover attributable to taxable customers should be estimated, and that the GmbH could not adjust the VAT erroneously charged on that portion. The tax authority lodged an appeal against the administrative court’s judgment, arguing that, if the risk of revenue loss is not entirely eliminated, no estimation is permissible and the adjustment of the payable VAT must be refused in full. In its subsequent preliminary ruling in Case C-794/23., the CJEU emphasised that the correction of improperly charged VAT cannot be refused in full solely on the ground that the customers were not exclusively final consumers. The Court clarified that, in such cases, a taxable person’s customer cannot be regarded as a final consumer merely because, in the circumstances at hand, the service was not used for business purposes. The Court did not consider the estimation of turnover attributable to taxable customers to be contrary to EU law; however, the judgment stipulates that, in making such an estimate, all relevant circumstances must be assessed and the taxable person must be given the opportunity to challenge the result of the estimation.
Lépjen kapcsolatba szakembereinkkel!
Az alábbi űrlap segítségével feliratkozhat szakmai hírlevelünkre, így folyamatosan értesítjük az adózás, a könyvelés és a bérszámfejtés területén megjelenő újdonságokról.
