On 15th November 2017, the European Court of Justice (ECJ)  ruled a judgment concerning the rejection of the Input VAT deduction by the tax authorities in Germany (Finanzamt Neuss and Finanzamt Bergisch Gladbach). The rejection was on the basis of invoices containing only the letterbox address of the seller and not the physical address where the business activities are carried out.

Case Summary

The two car dealers in Germany (RGEX GmbH & Igor Butin) were purchasing cars from suppliers outside Germany. The invoices that the dealers received from the suppliers only showed letterbox addresses. According to the German law, to recover VAT on invoices, the principal place of the business is required on the invoices.

The ECJ realised that the obligation of principal address is too strict and passed a judgment in favour of the taxpayer during its preliminary hearing. The requirements of VAT invoicing rules have now been eased and a letterbox address is enough to recover the VAT.

This judgment is now a part of EU VAT law of all EU jurisdictions and is relevant in all Member States.
Click here for the the detailed proceedings of the court

How does this affect your business?

As a result of this ruling, if you are a seller doing business in any EU Member State, you can now claim your VAT back even if the invoices you submit only carries the letterbox address of your supplier without the physical address of the business activities.