Non-decadence nature of deadline for non-resident VAT refund: implications of C-746/22 ruling.

The deadline for providing additional information for non-resident VAT refunds is not a peremptory deadline.

• The Court of Justice of the European Union (CJEU) has ruled that the one-month deadline for non-resident businesses to provide additional information to tax authorities when applying for a VAT refund is not a peremptory deadline.
• This means that even if a business does not provide the information within the one-month deadline, the tax authority cannot automatically refuse the refund application.
• Instead, the tax authority must first notify the business of the reasons for the refusal and give the business the opportunity to appeal the decision.

The Hungarian tax authority’s practice of archiving refund applications was unlawful.

• In the case at hand, the Hungarian tax authority archived a Slovakian company’s VAT refund application because the company did not provide additional information within the one-month deadline.
• The CJEU ruled that this practice was unlawful because it prevented the company from obtaining a refund to which it was entitled.
• The CJEU also found that the Hungarian tax authority’s practice violated the principle of good administration, as it took decisions based on incomplete or inaccurate information.

Key takeaways

• The deadline for providing additional information for non-resident VAT refunds is not a peremptory deadline.
• Tax authorities must notify businesses of the reasons for refusing VAT refund applications and give businesses the opportunity to appeal the decision.
• Archiving VAT refund applications is not a lawful practice.