On May 16, 2024, the ECJ issued the AG Opinion in the case C-746/22 (Slovenske Energeticke Strojarne).
Context: Reference for a preliminary ruling — Common system of value added tax (VAT) — Detailed rules for the refund of VAT to taxable persons not established in the Member State of refund — Directive 2008/9/EC — Article 20 — Request for additional information made by the Member State of refund — Information to be provided within one month — Closure of the proceedings on the ground that the taxable person did not reply within that period — Article 23 — Refusal to take into account information submitted for the first time in the course of the appeal proceedings – Principle of effectiveness – Principle of neutrality of VAT – Principle of sound administration
Article in the EU VAT Directive
Articles 1, 20(1) and (2), 21, 23(1) and (2), 26 and Article 29(1) and (2) of Directive 2008/9.
Facts
- Slovenské Energetické Strojárne AS (hereinafter: SES) is a taxable person, established and VAT registered in Slovakia.
- It applied for a refund of VAT in Hungary. The Hungarian tax authorities asked additional information from SES, which was sent to the email address of SES.
- As SES did not reply on time (according to the Hungarian tax authorities), the Hungarian tax authorities terminated the refund procedure.
- SES objected to this decision and at the same time provided the additional information.
- On appeal, the Hungarian tax authorities confirmed the primary decision, because Hungarian law stipulates that no new facts or new evidence may be adduced in the notice of appeal and in the proceedings initiated following the notice of appeal, except for grounds for invalidity, which the applicant had already known before the determination was aware of the primary decision, but which he did not adduce or submit despite the request to that effect from the tax authorities (hereinafter: the prohibition on submitting nova).
- The dispute eventually reached the referring court. The referring court first of all wishes to know from the Court of Justice whether the aforementioned prohibition on the supply of nova leads to a substantive restriction that goes beyond the conditions laid down in Article 23(2) of Directive 2008/9/EC with regarding legal remedies.
- Secondly, the referring court wishes to know whether the one-month period laid down in Article 20(2) of Directive 2008/9 constitutes an expiry period.
- Finally, the referring court wants to know from the EU Court whether a national regulation under which the tax authorities terminate the procedure if the taxpayer applying for a refund does not comply with its obligation to provide additional information and the request for VAT refund cannot be assessed in the absence thereof.
Questions
1. Should Article 23(2) of Council Directive 2008/9/EC laying down detailed rules for the refund of value added tax provided for in Directive 2006/112/EC to taxable persons not resident in the Member State of refund but are established in another Member State (hereinafter ‘Directive 2008/9’) must be interpreted as meaning that the conditions for bringing legal remedies laid down in that directive do not preclude national legislation — namely, Paragraph 124(3) of Law CLI of 2017 on tax procedure (hereinafter: ‘Law CLI of 2017’) – which, when assessing applications for VAT refunds pursuant to Council Directive 2006/112/EC on the common system of value added tax ( after this:‘VAT Directive’) does not allow the submission of new facts or new evidence at the objection stage which the applicant was aware of before the adoption of the primary decision, but which he has failed to adduce or submit despite a request from the tax authorities , which constitutes a substantive restriction that goes beyond the conditions laid down by Directive 2008/9 with regard to form and time-limit?
2. Does an affirmative answer to the first question mean that the one-month period laid down in Article 20(2) of Directive 2008/9 can be regarded as an expiry period? Does this practice comply with the right to an effective remedy and to a fair trial enshrined in Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), Articles 167, 169 and 170 and Article 171(1) of the VAT Directive and with the principles of fiscal neutrality, effectiveness and proportionality developed by the Court of Justice of the European Union?
3. Must the provisions of Article 23(1) of Directive 2008/9 concerning the total or partial rejection of the refund application be interpreted as not precluding national legislation — namely, Paragraph 49(1) under b) of Act CLI of 2017 – whereby the tax authorities terminate the procedure if the taxpayer requesting a refund does not comply with its obligation to provide additional information despite the request to that effect from the tax authorities, the request cannot be assessed in the absence thereof and there is no ex officio continuation of the procedure?
AG Opinion
(1) Article 20(2) of Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State
must be interpreted as meaning that the one-month period laid down therein for providing additional information at the request of the authority considering a value added tax (VAT) refund application submitted by a taxable person established in another Member State cannot be considered mandatory.
(2) Article 170 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2008/8/EC of 12 February 2008, Article 20(2) of Directive 2008/9, and also the principles of effectiveness and fiscal neutrality
must be interpreted as precluding the application of provisions of national law which exclude the possibility of relying, in appeal proceedings, on additional information or documents requested by the first-tier tax authority and provided by the taxable person only at the appeal stage to the second-tier tax authority.
(3) Article 23 of Directive 2008/9
must be interpreted as not precluding the application of a provision of national law under which proceedings relating to an application for a refund of VAT to a taxable person established in another Member State are discontinued without consideration of the refund application where that taxable person has failed to comply with its obligation to provide additional information at the request of the authority considering the application, pursuant to Article 20 of that directive, provided that there is an effective judicial procedure under national law for appealing against the decision to discontinue the proceedings, allowing the taxable person, in particular, to rely, in the course thereof, on the additional information which it did not provide within the time limit in the discontinued proceedings. Otherwise, the decision to discontinue proceedings should be regarded as a decision to refuse a refund.
Decision
1. The first subparagraph of Article 23(2) of Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, for taxable persons who are not established in the Member State of refund but in another Member State, read in the light of the principles of neutrality of value added tax (VAT) and effectiveness,
must be interpreted as meaning that:
it precludes national legislation under which a taxable person who has submitted an application for a refund of VAT is prohibited from providing, at the stage of the complaint before a second-instance tax authority, additional information, within the meaning of Article 20 of that directive, requested by the first-instance tax authority and which that taxable person has not provided to that authority within the one-month period laid down in Article 20(2) of that directive, since that period does not constitute a limitation period.
(2) Article 23 of Directive 2008/9
must be interpreted as meaning that:
it does not preclude national legislation under which a tax authority must close the VAT refund procedure where the taxable person has not provided, within the prescribed period, additional information requested by that authority under Article 20 of that directive and that, in the absence of that information, the application for a refund of VAT cannot be processed, provided that the decision to close the application for VAT is considered to be a decision rejecting that application for a refund, within the meaning of Article 23(1) of that directive, and that it may be the subject of appeals satisfying the requirements laid down in Article 23(2), of the first paragraph of that directive.
Summary
The interpretation of certain provisions of Council Directive 2008/9/EC regarding the refund of value added tax (VAT) for taxable persons not established in the refunding Member State is clarified.
The first provision states that national legislation cannot prohibit a taxable person from providing additional information during the complaint stage if it was not provided to the tax authority within the one-month period specified in the directive. This period is not considered a limitation period.
The second provision allows national legislation to close the VAT refund procedure if the taxable person does not provide the requested additional information within the prescribed period. However, the decision to close the application for refund is considered a rejection of the application, and the taxable person has the right to appeal this decision according to the requirements set in the directive.
Source
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