Comments on ECJ C-270/24: ECJ to Rule on VAT Deduction Denial Due to Invoice Errors Despite Proven Economic Activity

The European Court of Justice (ECJ) will decide if a company’s right to VAT deduction can be denied due to invoice errors, despite the proven and recognized economic activity.
Granulines Invest Kft, a Hungarian waste management company, was denied a VAT refund during a tax audit due to issues with the invoice for a purchased shredder.
The Hungarian tax authority cited incorrect distribution chain, execution date, and inflated machine price on the invoice.
Granulines was fined for these invoice errors.
The referring court, Fővárosi Törvényszék, asked the ECJ if the VAT Directive permits denying VAT deduction based on invoice errors when the economic activity is proven.
The court argues that VAT refunds should be based on the economic result, not just the formal correctness of the invoice.
It questions whether the Hungarian tax authority’s actions violate EU principles of fiscal neutrality and effectiveness.
The ECJ will determine if invoice errors can justify denying a company’s right to VAT deduction, even when the economic transaction is legitimate.
The ruling could clarify the balance between formal invoice requirements and the underlying economic reality for VAT purposes.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.