Austria MOF Clarifies VAT Rules for Subcontractor Services Supported by Fraudulent Cover Invoices

The Austrian Federal Ministry of Finance Aug. 26 posted Federal Finance Court Decision No. RV/7101058/2018, clarifying input VAT deduction rules for services supported by fraudulent cover invoices. The taxpayer, a construction contractor, claimed input VAT deductions for subcontractor costs. Following an audit, the Tax Office denied certain claims due to fraudulent cover invoices from the subcontractors, lack of records, and non-consecutive or unrecorded outgoing invoices. On appeal, the Federal Finance Court found that: 1) the Tax Office could estimate the additional turnover due to the missing or falsified business records, insufficient clarifications, and cash shortages; 2) the true economic substance ...