On 26 March 2020, Advocate General Bobek delivered its opinion in case C‑835/18 (SC Terracult SRL), assessing that a taxpayer is allowed to correct invoices for transactions already subject to a tax audit, under certain conditions.
Donauland SRL (later incorporated into Terracult SRL) was the subject of a tax inspection carried out by the Romanian tax authorities which analyzed the supplies of rapeseed to Almos Alfons Mosel Handels GmbH (Germany) (“Almos”). Donauland was unable to provide supporting documents to justify the VAT exemption applied on the supplies of rapeseed – considered intra-Community supplies. Therefore, the Romanian tax authorities issued a tax assessment imposing additional VAT on these supplies, which were reclassified into national supplies (subject to 24% VAT).
Donauland did not challenge the findings of the tax authorities within the legal deadline. Subsequently, Almos informed Donauland that the rapeseed never left Romania and that the invoices should have been issued to Almos’s Romanian VAT code.
As local supplies of rapeseed to Romanian VAT registered taxpayers qualified as transactions subject to the reverse charge, Donauland corrected the invoices to Almos (from invoices with 24% VAT subsequent to the tax audit to invoices subject to reverse charge by the beneficiary) and requested the refund of the VAT paid subsequent to the tax assessment.
Donauland’s request was rejected and the case was referred to the Court of Justice of the European Union.
In its opinion, Advocate General Bobek considers that it is possible correcting invoices for transactions carried out during a period which was subject to a tax inspection and for which a final tax assessment was issued, if after this tax assessment additional information came to light which would give rise to the application of the reverse charge mechanism.
The correction of invoices can be denied if it was made in bad faith, constituted an abuse of rights, was connected to a tax fraud of which the supplier was aware or should have been aware.
If the Court of Justice of the European Union will follow the same approach as the Advocate General Bobek, this will again reinforce the fact that tax periods already closed can be re-opened when the taxpayer comes across additional information on the transactions carried out.
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