On 8 April 2021, the Supreme Administrative Court (Verwaltungsgerichtshof) of Austria submitted several questions to the European Court of Justice (the “ECJ”) for a preliminary ruling in connection with invoicing requirements under the EU VAT rules for intra-Community triangular transactions (case C-247/21).
In principle, in situations involving two supplies of goods between three VAT-registered taxpayers in three different EU Member States, and where the goods are directly transported from the first supplier to the final recipient (i.e. so-called triangular transactions), VAT should not be charged on any of the two supplies and none of the two suppliers should be obliged to register for VAT purposes in one of the foreign Member States involved in the transaction. Instead, the final recipient of the goods should self-assess local VAT in its Member State.
In the case at hand, the applicant company, a private limited company established in Austria purchased vehicles from a supplier based in the United Kingdom (before Brexit), and then resold them to a Czech company, with the vehicles being transported directly from the United Kingdom to the Czech Republic. The three European companies were all registered for VAT purposes in their home countries.
The Austrian company issued invoices to the Czech company, indicating “VAT-exempt intra-Community triangular transaction". These invoices however did not mention the obligation, for the purchasing taxpayer, to self-assess local VAT.
The Czech company was later identified in the Czech Republic as a "missing trader" by the local tax authorities which had not declared nor paid any VAT on the triangular transactions at stake and which could not be contacted by the local tax authorities.
On the basis of the failure to mention the purchasing taxpayer’s obligation to self-assess local VAT on the invoices issued by the Austrian supplier, the Austrian VAT authorities considered the specific provisions relating to triangular transactions as inapplicable and assessed Austrian VAT on a deemed intracommunity acquisition of goods by the Austrian supplier.
The taxpayer appealed this decision by the Austrian authorities in front of the Austrian courts. In parallel, the taxpayer issued corrected invoices, including the required indication of the purchaser’s obligation to self-assess local VAT, which invoices however, could not be successfully delivered to the purchaser.
Questions referred for preliminary ruling
In the context of the above facts, the Supreme Administrative Court (Verwaltungsgerichtshof) of Austria decided to stay the proceedings and referred several questions, for preliminary ruling, to the ECJ.
It first asked whether the mere reference to an “exempt triangular transaction” in itself was or was not sufficient to meet the requirement of the VAT Directive to mention the purchaser’s liability to self-assess local VAT.
In the event of a negative answer, by the ECJ, to that first question, the Austrian judges asked whether a corrective invoice would have the effect of rectifying the initial omission of an explicit reference to the VAT liability in the Member State of the purchaser, and, if so, whether such rectification would or not only be effective if there was proof that the purchaser actually received the corrective invoice. Finally, the Austrian court queried whether the correction of the invoice would or would not have a retrospective effect.