Overstated VAT rate on a purchase invoice and refund of overpaid VAT by the purchaser with interest

The financial authority found that the applicant’s output tax transactions were subject to a reduced VAT rate and, at the same time, that the applicant’s purchases were also subject to a reduced rate (7%) – the applicant’s input VAT deduction was reduced accordingly. The authority claimed the amounts of VAT due plus interest.
The complainant asked its suppliers to correct the invoices issued and to refund the difference. All suppliers raised a plea of limitation – the disputed invoices had not been corrected, the complainant had not received the requested refunds from its suppliers.
The German court posed the question to the CJEU – did the complainant have a direct right vis-à-vis the tax authority to reimbursement of the overpaid tax with interest, when there is still the possibility that the tax authority will be called upon by the suppliers on the basis of corrected invoices at a later date, with the risk that the tax authority will have to reimburse the same VAT twice?”.
According to the CJEU, if the purchaser has paid too much VAT to his supplier, he cannot be accused of fraud, abuse, negligence and when it is impossible, difficult, to refund the VAT from the supplier, he can request this VAT refund directly from the tax authority, but the supplier no longer – the tax authority, after refunding the excess to the purchaser, has the right to refuse to refund the VAT to the suppliers. Such an action excludes the risk of double reimbursement. And when the authority fails to refund the overpaid tax to the purchaser within a reasonable time, interest on late payment is due.