In a decision dated 23 October 2025, the Administrative Court of Martinique reaffirmed that the right to deduct VAT is subject not only to substantive conditions, but also to strict reporting formalities, including where errors are corrected through amended VAT returns.
The case concerned the company Foyalbaz, which challenged the refusal of the French Tax Authorities to refund VAT credits relating to the years 2014 to 2016. The company had filed corrective VAT returns to regularise input VAT amounts that had initially been omitted.
However, the omitted input VAT was not reported on the specific line dedicated to previously unclaimed input VAT. Instead, the amounts were simply included in the overall input VAT figure declared on the return.
The Court recalled that, under the applicable VAT rules, omitted input VAT can only be validly regularised if it is reported separately on the dedicated line of the VAT return. This requirement applies even where the corrective return is filed within the statutory time limits. Merely including the omitted amounts in the total input VAT is not sufficient to meet this formal requirement.
In this case, the Court held that the condition was not met. As a result, the French Tax Authorities were entitled to deny the VAT deduction, regardless of whether the substantive conditions for deduction were otherwise fulfilled. The Authorities were also under no obligation to neutralise the error or to apply any automatic offset.
This decision is a clear reminder that VAT recovery is highly sensitive to reporting formalities. In practice, a simple error in how input VAT is reported can be enough to jeopardise a VAT refund, even where the underlying entitlement to deduction is not in dispute.
