JUDGEMENT OF THE CJEU. IMPOSSIBILITY TO APPLY THE TRIANGULAR TRANSACTION SCHEME DUE TO THE LACK OF REFERENCE TO THE “REVERSE CHARGE RULE” IN THE INVOICE. CASE C-247/21 LUXURY TRUST AUTOMOBIL GMBH
In this judgment, with case number C-247/21, dated on December 8, 2022, the requirements for the application of the simplification scheme for triangular transactions are reviewed, as well as the possibility to rectify, with retroactive effects, an invoice which did leave the reference of “reverse charge rule” out.
In the factual situation intervenes 3 operators within a chain transaction of sale of luxury vehicles, which were directly transported from the UK to the Czech Republic: there are one supplier established within the UK (when this was part of the EU before Brexit), the entity Luxury Trust Automobil as intermediary established in Austria, and a recipient established within the Czech Republic. Luxury did act using its Austrian VAT number and did issue the sale invoice including a reference of “exempt intra-Community triangular transaction”, which from the point of view of the Austrian Tax Authorities did not transfer the tax liability to the recipient due to the lack of the explicit reference “reverse charge” and therefore, the triangular transaction was not properly executed. Given this, Luxury did rectify the invoices to include the reference to “reverse charge rule”, but the Austrian Tax Authorities did refuse said rectification a posteriori.
Under this scenario, the Austrian Tax Authorities did consider that the intra-Community acquisitions must be deemed to be placed in Austria, since Luxury did use the Austrian VAT number and they would not have proved that this was taxed in the Czech Republic, conclusion which was appealed for reconsideration by Luxury.
Given these facts, the Austrian Court refers to the ECJ for a preliminary ruling, in first place, if the reference “exempt intra-Community triangular transaction” in the invoice, issued without VAT quotas, could be regarded to transfer the tax liability to the recipient for the purpose of the requirements established in the article 42, paragraph a, of the Directive. The ECJ emphasizes that said article 42 introduces an exception to the rule of taxation of the intra-Community acquisitions of goods, conditioned to the concurrence of the cumulative requirements of paragraphs “a” (material requirements) and “b” (formal requirements). Among said material requirements, both articles 42, paragraph a, and 141, paragraph e, would refer to article 197, which in turn compels the observance of the article 226 for transferring the tax liability to the recipient, in order to apply the exemption of the triangular transaction scheme. Thus, considering that this is a material requirement, it would not be possible to replace the reference “reverse charge” to another wording, as long as it is expressly required by the article 226, paragraph 11 bis.
On the other hand, it is also raised the question if it is possible to rectify the invoice with retroactive effects adding the reference “reverse charge”, to transfer the tax liability to the recipient, as well as if the validity of the rectification is also conditioned to the reception of the recipient which did appear as “disappeared”. The ECJ clarifies that it would not be possible to rectify an invoice with the purpose of applying the triangular transaction simplification when a material requirement for the exception to be effective is missing, since the inclusion a posteriori of this material requirement would thus constitute the first invoice required, which could not have retroactive effects.
Finally, it is raised the question about which invoicing regulation would be applicable, since from the point of view of Luxury the Czech invoicing regulation would not mandatorily require the inclusion of the explicit reference “reverse charge”. Notwithstanding this, considering that this is a material requirement, in order to legitimately designate the receipt as VAT liable, so therefore the requirements of the triangular transaction simplification would not be met, it is not needed to determine the national invoicing regulation to be applied.
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