This case has been recently released by the ECJ. It seeks to address some of the issues around the implementation of the Kittel principle. Although the case started in relation to a criminal investigation that went nowhere, the subsequent civil litigation where there was an attempt by the authority to withhold VAT it believed was connected to fraud led the Court firstly to say that if a taxpayer was denied access to information the tax authority held and which was material to the case, then any decision made may have to be annulled or reversed. Secondly, where VAT was withheld based on uncorroborated doubts the authority has about certain economic activity, should no longer preclude the deduction of VAT where a valid tax invoice is held. The ruling makes clear that a tax authority may require additional documents, but the only document it can require to enable the deduction of VAT is a valid tax invoice as it set out in the VAT directive.
SC CF SRL. V Romanian Tax Authorities
