The content relates, in particular, to proper invoices as a precondition for input tax deduction and exceptions to this (objective proof of the individual material preconditions for input tax deduction) and, moreover, alternative ways to rectify invoices or cancel and reissue them. Here is a summary of the main points:
- Inaccurate invoices may be corrected with retroactive effect if they include the five key elements (the supplying business, the recipient of the goods or services, a description of what was supplied, the price and the amount of VAT charged shown separately). According to the BMF, invoices may be corrected in the traditional way as well as by means of cancelling and reissuing. In both cases the correction can have a retroactive effect
- Even if the invoice is not rectified, input tax deduction from an inaccurate invoice is generally possible if the business owner produces additional objective proof.
- However, the BMF is of the view that it is of greater importance to openly state the VAT amount. This cannot be replaced by any other proof (preventing the retroactive effect in the case of corrections of initially VAT-exempt transactions that are subsequently changed to being subject to VAT).
- Furthermore, input tax deduction without an invoice remains precluded.
- Simplification concerning the correction date and the advance return: If an invoice correction has a retroactive effect then the rectification of the old VATable period can be dispensed with and the correction can be made in the current VAT accounting period. This simplification does not however apply from one year to the next.
Please note: The wide-ranging BMF circular with its 32 marginal numbers goes into numerous details and also includes the respective amendments to the German ordinance on the application of VAT (UStAE).