Claiming VAT on VAT-only invoices

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The European Court made an interesting decision in relation to transactions between two Portuguese companies, Biosafe and Flexipiso.

Background Facts

Biosafe sold rubber granules manufactured from recycled tyres to Flexipiso. The total value of sales over a 2 ¼ year period was €664k. Biosafe charged VAT at 5%.

After an inspection in 2011 the Portuguese VAT authorities ruled that the supplies should have been charged at 21%, and issued an assessment of around €100k.

Biosafe invoiced Flexipiso for this VAT amount in October 2012, and sought a civil claim against the company.

Flexipiso was denied input tax recovery in relation to the additional VAT charged on supplies originally invoiced before October 2008, since they were more than 4 years after the original invoices were issued.

Question for the ECJ

Put simply, the ECJ considered whether the 4 year limit should run from the date of issue of the original invoices, or the date of the issue of the rectifying documents.

The Court followed the logic of the Volkswagen case ( and held that, effectively the four year limit re-starts when the VAT-only invoice was issued. The recipient company was therefore able to recover the VAT shown on that document.

The ECJ was unimpressed with an argument from Portugal that the arrangement between the two companies was a contrived VAT fraud.

The case is here:

About Les Howard


Hi, I am a VAT Consultant, working mainly with charities. I am based in Cambridgeshire

I have over 20 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.


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