The ECJ released the facts and questions in the case C-527/24 (Harry and Associés).
Article in the EU VAT Directive 2006/112/EC.
Article 167 of the EU VAT Directive 2006/112/EC.
Article 167
A right of deduction shall arise at the time the deductible tax becomes chargeable.
Facts
- In September 2016, the company Harry et Associés filed a refund application with the French tax authority for EUR 98,740.93, related to transactions conducted in Italy in 2015. The application was forwarded to the Italian tax authority, Centro Operativo di Pescara (COP), but it contained errors that made the file unreadable. As a result, the application was not processed, and the tax authority remained silent on the matter.
- Harry et Associés appealed to the Tax Court of First Instance, which ruled in their favor and recognized their entitlement to a VAT refund. The COP eventually paid out the refund but appealed the decision to the Tax Court of Second Instance.
- The appeals court overturned the ruling of the first instance, stating that the application from the French company was inadmissible and did not meet the procedural requirements for a judicial challenge.
- Harry et Associés then appealed to the Supreme Court of Cassation (Corte di Cassazione), but their appeal was rejected. The court affirmed that an application for a VAT refund that is not visible to the tax authorities due to technical faults in electronic transmission cannot trigger a situation of appealable silent denial.
- Based on the Supreme Court of Cassation judgment, the COP issued a payment order to recover the previously disbursed VAT refund. Harry et Associés challenged this payment order before the Tax Court of First Instance, arguing that it should be set aside because it contradicted EU Directive 2006/112/EC, the general principles of VAT neutrality and proportionality, and that the entitlement to a VAT refund should be recognized.
- The Tax Court is now tasked with ruling on this complex issue involving the correct application of EU law.
Questions
Do Article 167 of Directive 2006/112/EC and the general principles of VAT neutrality and proportionality of the limitation of the right to deduct VAT preclude:
– (a) national rules – identifiable with Article 21(2) of Legislative Decree 546/1992 and Article 38 bis.2 of Presidential Decree No 633/1972 – which, in domestic law, by allowing a refund
application vitiated by technical computer errors to be declared as devoid of effect, preclude access to the courts, and are such as to entail forfeiture of the right to be refunded in a substantive situation in which the VAT refund is due to the taxpayer;
– (b) a principle of law, such as that affirmed by the Supreme Court of Cassation, whereby ‘an application for refund of a VAT credit, which, owing to technical faults in the electronic transmission, is not visible to the tax authorities, is not suitable for creating a situation of appealable silent denial, as the tax authorities are not in a position to take action’, such as to preclude direct access to the courts in the case at hand, and therefore such as to entail forfeiture of the right to a refund even in a substantial situation in which the refund is due?’
Source
See also
- E-Invoicing/Real Time Reporting – What can you find on VATupdate.com
- Worldwide Upcoming E-Invoicing mandates, implementations and changes – Chronological
- Collection of E-Invoicing Guides – Worldwide – VATupdate
- Join the Linkedin Group on Global E-Invoicing/E-Reporting/SAF-T Developments, click HERE
