Specifically, Germany refuses in some cases to refund VAT without asking for additional information from the refund applicant where it considers that the information provided on the nature of the goods and services provided is insufficient for coming to a decision on the application.
This practice leads to situations where a VAT refund is denied to applicants that fulfil the substantive requirements, and violates the right to a VAT refund established under the EU rules (the VAT Directive, Council Directive 2006/112/EC) and the Refund Directive, Council Directive 2008/9/EC).
With today's decision, the European Commission is enforcing EU legislation in its role of Guardian of the Treaties. The decision to refer the matter to the Court follows Germany's failure to bring its legislation into line with EU law following the Commission's reasoned opinion.
Most businesses that incur VAT in connection with their activities in an EU country where they do not habitually supply goods or services (and so are not required to register for VAT) are nevertheless entitled to deduct that VAT, as outlined in the VAT Directive (Council Directive 2006/112/EC). This ‘deduction' is made by means of a refund from the EU country where they paid the VAT.
For More Information
On the key decisions in the January 2019 infringements package, see full MEMO/19/462.
On the general infringements procedure, see MEMO/12/12.
On the EU infringements procedure.