Case: Input tax recovery not permitted in the absence of a purchase invoice

European Court of Justice (Fourth Chamber),

T von Danwitz President of the Seventh Chamber Acting as President of the Fourth Chamber, K Jürimäe, C Lycourgos, E Juhász (Rapporteur) and C Vajda Judges,

Judgement delivered 21 November 2018

Value added tax — Directive 2006/112/ECC —Article 167, 168, 178 and 273 — Scope of the right of deduction – Absence of invoices – Recourse to a court-commissioned expert report – Burden of proof of the right of deduction – Principles of fiscal neutrality and proportionality

Lucreţiu Hadrian Vădan v Agenţia Naţională de Administrare Fiscala [2018] BVC 48


Mr Vădan is a Romanian builder. His turnover exceeded the VAT registration threshold and he belatedly registered for VAT. The Romanian tax authority assessed him for VAT they calculated was due on his turnover. Mr Vădan challenged the assessments on a number of grounds, one of which was that he should be entitled to deduct input VAT incurred on his costs from output VAT due on his sales.

However, he did not have any documentation to support input tax recovery. Under Romanian law his suppliers had not been required to issue him with an invoice and the till receipts he had retained were illegible due to the poor quality of the ink. The Romanian Court referred to the ECJ the question of whether or not Mr Vădan could assess his input tax indirectly, using the evidence of a court appointed expert.

The ECJ ruled that input tax recovery cannot be based solely upon such an expert report.

The ECJ noted that the report proposed by the Romanian Court would be based upon an assessment of value of the labour and materials required by the taxpayer to make his supplies. A report compiled on this basis would not establish that the appellant had ‘actually paid that tax in respect of the input transactions’ (para 47).


The ECJ’s conclusion that in order to recover VAT incurred on costs a taxable person must have specific evidence to support that claim and that a report of the type proposed is insufficient is unsurprising.

For commentary on the recovery of input tax see Indirect Tax Reporter at ¶19-000.

Average: 4 (1 vote)