Germany loses VAT recovery case at ECJ

Germany has lost an important VAT recovery case at the European Court of Justice. The EU court of last resort held that foreign companies should be allowed to submit German VAT reclaims initially without supporting invoices without losing their rights for repayment.

The case concerned a claim to recover VAT on German expenses by a non-resident business. The company submitted their recover claim on time. However, they were only able to send supporting invoices after the filing deadline. The German federal tax administration struck down their claim.

However, on appeal to the ECJ, it held the German view violated the principle of VAT neutrality, denying foreign businesses of their right to recover VAT they are entitled to. German is one of the most complex countries for foreign VAT reclaims, with a high rejection rate.