The Court of Justice of the European Union has addressed the question of whether the value added tax which is entered on a tax invoice is also payable by every person that calculates it in this way on the invoice.
The reason for this examination was that the Austrian tax authorities had refused to grant a request for a tax refund to an Austrian company that had calculated the wrong VAT amount on invoices which it had issued to final customers (non-payers of VAT) throughout the year. This refund was supported by the submission of a supplementary tax return where the VAT amount was reduced to the correct rate. The Austrian tax authorities based their decision on the fact that if the tax authorities were to refund the incorrectly paid tax, there would be unjust enrichment on the part of the company, since its clients had paid a higher rate.
The Court of Justice then ruled in favor of the company. For, according to Article 203 of the VAT Directive, it must be interpreted as meaning that the company is not required to pay the incorrectly invoiced part of the VAT in view of the absence of any risk of loss of tax revenue. However, this fact only applies to cases where the final customer is a consumer who cannot claim input VAT.
