Incorrect or unauthorized tax statement

An incorrectly or unjustifiably reported VAT amount does not always have to be paid to the tax office.

Anyone who shows a higher VAT amount in an invoice for a delivery or other service than would be due according to the law also owes the excess amount to the tax office. Even if an entrepreneur shows the VAT in an invoice although he is not entitled to show the tax separately (e.g. in the case of a small business subject to VAT), he must pay this tax to the tax office. The same applies if someone invoices as a supplier and shows a VAT amount separately, although they are not an entrepreneur or do not carry out the invoiced delivery or other service at all.

Several years ago, the Federal Fiscal Court ruled that a negative amount that is incorrectly or unjustifiably shown on an invoice is not owed to the tax office. In the case in question, the amounts shown had a hyphen after the euro symbol, which the Federal Fiscal Court interpreted as a minus sign. However, the issuer of the document did not use these negative amounts to settle accounts for services rendered by it, but for a bonus in accordance with an annual conditions agreement, which had been agreed as a reduction in remuneration to the issuer of the document and was to be paid by the recipient of the document.

The Federal Ministry of Finance has now reacted to this ruling and amended the VAT application decree accordingly. Accordingly, the exhibitor does not owe the tax office an incorrectly or unjustifiably reported VAT amount if he does not invoice for a service provided by him, but for a reduction in payment and also expresses this by adding a minus sign to the openly reported amount.

However, in the case of a credit note within the meaning of VAT law, in which a minus sign is used to express that the recipient of the service owes the supplier the payment of the stated VAT amount, the ruling is not applicable, as in these cases a (supposedly) rendered service and not a reduction in payment is to be settled. This may result in the recipient of the credit note being liable for VAT.

In the same ruling that led to the change, the Federal Fiscal Court also ruled that the content of other documents must be taken into account in addition when checking whether a service is invoiced in a document if reference is made to these documents in the invoice. The tax authorities have also adopted this requirement in the VAT application decree.