Investimentos Imobiliários e Turísticos – ECJ finds that mere technical non-compliance with VAT requirements for complete invoices should not prevent input tax claims

A law firm’s invoice paid by a Portuguese registrant, which simply referred to “Fees for legal services rendered until the present date,” did not satisfy the EU Directive respecting the requisite detail to be provided on an invoice. However, the Portuguese registrant then provided the Portuguese authority with other documents (not in invoice form, as technically required) containing the missing particulars. The European Court of Justice found that an input tax deduction should not be denied, stating:

[T]he fundamental principle of the neutrality of VAT requires deduction of input VAT to be allowed if the substantive requirements are satisfied… . It follows that the tax authorities cannot refuse the right to deduct VAT on the sole ground that an invoice does not satisfy the conditions required by…[the] Directive…if they have available all the information to ascertain whether the substantive conditions for that right are satisfied.

This interpretive approach would be helpful to a Canadian registrant who is claiming an input tax credit where it has good documentary support that nonetheless does not technically comply with the Input Tax Credit Information (GST/HST) Regulations.

Neal Armstrong. Summary of Barlis 06 - Investimentos Imobiliários e Turísticos SA v. Autoridade Tributária e Aduaneira, ECLI:EU:C:2016:690 (Case C-516/14) (European Court of Justice (Fourth Chamber)) under ETA s. 169(4).