Collection, filing, and payment of tax

Generally, the business must pay to the tax authorities the
VAT due either on its supplies – regardless of whether the VAT
has been collected from the business’s customers – or due on
advance payments.

If the business providing the goods or services is able to prove
that the consideration owed by the customer is uncollectible,
the business has to correct the amount of VAT due to the tax
authorities to its favor, but the customer, too, must correct his/
her input tax deduction.

If a business issues a VAT invoice incorrectly showing VAT due
on a supply, this VAT amount shown on the invoice becomes
payable to the tax authorities, while the customer is not entitled
to input VAT deduction. In order to avoid such tax liability, the
business can correct the invoice. In certain cases, the consent
of the tax authorities is required. This consent will be granted
only if the risk for the treasury of losing tax revenue has been
eliminated.

This means that the issuer must show either that the
invoice recipient did not claim an input tax credit based on the
improper invoice or that any input VAT deducted has been repaid
to the tax authorities