Unofficial translation:
- After a dispute with a contractor, EUROVIA (the applicant) was ordered to pay more than HUF 19 million plus interest.
- In the first instance, the applicant was ordered to pay, which was pronounced on 17.09.2004.
- The ruling in the second instance in this dispute was on 05.10.2010, and the applicant subsequently made the payment.
- An invoice was drawn up on 15.06.2011 on which 06.06.2011 was stated as the date of payment.
- The applicant deducted the VAT on the invoice for more than HUF 3 million in the VAT return for the second quarter of 2011.
- The Hungarian tax authorities (defendant) checked this, concluded that the applicant had wrongly requested a refund and a fine of HUF 394,000 was imposed.
- According to the defendant, the right to a VAT refund was time-barred in 2009, 5 years after the closure of the 2004 fiscal year.
- The applicant opposed this by administrative appeal, but this was rejected in the first instance.
- De Kúria annulled the decision of the tax authorities and the decision at first instance and ordered that the proceedings at first instance be repeated.
- In the new procedure, it was found that it was not the date of the decision that was initially taken as the basis for the limitation of the VAT refund, but the performance of the activities that formed the basis of the applicant’s dispute with the contractor.
- This was confirmed by the court at first instance, since it was not possible for the contractor to draw up the invoice, but this was done through the applicant.
By the first question, the referring court refers to the question when the beginning of the limitation period will start if, after a procedure in which payment is demanded by the court, the invoice is only drawn up after payment. This is relevant since the recipient of the invoiced also received the VAT due only after payment and after this fact was also able to transfer it to the tax authorities. The second question is put by the referring court because it seeks further interpretation of the relevant case law of the Court of Justice on the periods of VAT refund on invoicing after delivery of the goods or services, whereby the period of limitation has already expired at the time of invoicing when that period starts to run at the time of delivery.
Preliminary rulings:
1) The principle of fiscal neutrality and the formal conditions for the right to deduct VAT preclude the practice of a Member State which takes into account, for the exercise of the right to deduct, only the time when the chargeable event took place, without taking into account the fact that there was a civil dispute – settled by judicial means – over the extent to which the acts in question had actually been carried out, nor the fact that the invoice was not drawn up until it was issued judgment has been made by an irrevocable decision?
(2) If that is the case, may the limitation period for exercising the right to deduct VAT laid down by the legislation of the Member State at five years from the time the services were provided be exceeded?
3) If that is the case, the behavior of the recipient of the invoice in this case is that the compensation to be paid to the contractor, as determined by an irrevocable decision, is only paid after the contractor has initiated a recovery procedure against him and for that reason the invoice has only been drawn up after the limitation period has expired, does that affect the exercise of the right to deduct VAT?
Cited (recent) case law: C-533/16 Volkswagen, C-8/17 Biosafe – Indústria de Reciclagens, C-332/15 Astone.
Source: minbuza.nl (Dutch)
