The 2023 Annual Tax Act has been passed, so 2024 is already being served hot, or: a first draft of the 2024 Annual Tax Act already exists. Unsurprisingly – the legislator was forced to act – the inspection obligations for incoming invoices are increasing.

One after the other

Following a referral by the Hamburg tax court, the ECJ in the Rs. C-9/20 (Kollaustr. 136) decided, in simplified terms, that input VAT deduction from invoices of actual taxable persons cannot be claimed before payment – i.e. before the tax arises. Lack of mandatory information on invoices – § 14 para. 4 UStG does not yet provide for this – but recipients have not yet been able to determine how the supplier calculates its VAT. According to current law, it is therefore irrelevant for the purposes of input tax deduction whether the supplier calculates its VAT on the basis of agreed or received remuneration. This means that input tax can be claimed before VAT is incurred.

Expected change in the law

In § 15 UStG, a distinction will be made in future for the purposes of the time of input tax deduction according to how the supplier taxes its sales. Correspondingly, § 14 para. 4 UStG must be extended to include this information so that the recipient of the service is aware of this.

Practical impact

Process and work instructions for incoming invoice verification must be adapted or expanded and employees trained by 31.12.2025. If, in addition to other points, the “service and invoice” or “payment and invoice” test in particular is currently sufficient, a further distinction must be made in future according to how the supplier taxes its sales. Especially at the turn of the year, failure to do so entails the risk that an input tax deduction is already claimed in the current VAT year, although this would only have been permitted in the following year – if payment had been made. In addition to the current check as to whether invoices with a date of 31.12. have already actually been transferred to the taxpayer’s control this year, this is likely to become a simple method of achieving an additional result in BPs from 2026 – subject to e-billing.