In Kreuzmayr GmbH v Finanzamt Linz (Case C-628/16) (21 February 2018) the CJEU found that the Austrian tax authorities were entitled to deny the recovery of input tax in circumstances where VAT should not have been charged by the supplier who had subsequently become insolvent.
BP Marketing a German company sold petroleum products to BIDI an Austrian company. BIDI undertook to arrange the transport of the goods from Germany to Austria. Without informing BP Marketing BIDI resold the goods to Kreuzmayr agreeing that Kreuzmayr would arrange the transport of the goods from Germany to Austria.
BP Marketing regarded its supplies to BIDI as exempt intra-community supplies (Principal VAT Directive art 138). However BIDI submitted invoices to Kreuzmayr which included Austrian VAT which the latter paid. Kreuzmayr then sold the goods charging output tax and deducted the corresponding input...
