Indirect Tax & Global Trade Newsletter n°2
VAT & Customs Law News at a glance
- VAT : right of deduction and mandatory mentions on the invoices, European Union Court of Justice (EUCJ), Barlis and Senatex rulings 15 sept. 2016. The EUCJ adopts a more flexible position concerning the formalism related to the invoices, by judging that the Tax Authorities cannot deny the input VAT right of deduction solely on the ground that the invoices do not quote the mandatory mentions as provided for by the tax law (art. 226 VAT Directive), if the Tax Authorities have all the necessary information in order to check that the substance conditions related to the VAT right of deduction are fulfilled ; the EUCJ specifies also that the rectification of invoices is retroactive. Action : 1° firstly, to comply with the mandatory mentions when invoices are issued is still required : the 15€ penalty by wrong mentions or failure (art. 1737 of the French Tax Code) is not reconsidered by this EUCJ ruling. 2° secondly, to check the mentions on the input invoices received, and if necessary to have them amended by the issuer, is still necessary ; indeed the Court did not reversed its practice, knowing that the European Judge ruled that the regularization must be done before the Tax Authorities’ reassessment decision. 3° Finally, to check in case of reassessment that the late interests do not cover the time between the issuance of the initial invoice and the regularized invoice (retroactivity).
- VAT : Draft Finance Bill for 2017, a new purchase of goods and services return in B2B shall be filed in the 24 hours following the purchase, for the amounts superior to 863.000 euros. This ruling « real time » return should be an anti-VAT fraud tool. According to the National Assembly members who presented this amendment to the Draft Finance Bill, the VAT fraud would be facilitated by the recent more flexible regime introduced by the « loi sur l’Economie Bleue » related to the reverse charge mechanism in order to account for the import VAT. Action : to check the Finance Bill for 2017 ; if the provision related to the new purchase return is adopted in the final law, it will be necessary to adapt quickly the IT financial systems (before may 2017).
- VAT : e-invoicing required in the framework of public contracts, from Jan. 1st 2017 for the Large Companies and for the Public Bodies : in France all the companies shall use the e-invoicing in the framework of public contracts in 2020, but it is applicable gradually depending on the size of the companies. For the large companies (more than 5000 employees) it is applicable from Jan. 2017. For the intermediary companies (from 250 to 5000 employees) and the SMEs (from 10 to 250 employees) it will be applicable respectively from 2018 and from 2019. Action : Large Companies involved in public contracts must register on the Website Chorus Pro.
- Customs : exports, imports, Intra-EU transfers, transits of war materials and weapons and their ammunitions, two circulars issued by the French Customs Authorities, 14 Nov. 2016 : these guidelines provide further guidance for the application of recent texts. Action : to distinguish war materials on the one hand, and weapons and their ammunitions on the other hand, for « import-export controls » in the EU.