German Input Tax Refund Procedure In Practice May Violate EU Law

Author:Dr. Björn Enders
Profession:DLA Piper

On May 10, 2019 (C-371/19), the European Commission brought an action against Germany for its input tax refund procedure for EU taxable persons. In the view of the European Commission, Germany is violating the relevant EU regulations through the practical design of the input VAT reimbursement procedure. The Federal Tax Office (Germany) does not request missing information or supporting documents in the context of the examination of the applications, but rather rejects the refund applications directly. In the Commission's view, this procedure leads to inadmissible discrimination against EU foreign taxable persons in cases where such information can be submitted only after the deadline of September 30. The Commission submits that the Federal Tax Office's approach infringes the principle of VAT neutrality, the principle of the effectiveness of the VAT refund regime, and the principle of the protection of legitimate expectations.

DLA Piper comment: The practices of the Member States' tax authorities in the VAT refund...

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