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.

Source: nlfiscaal.nl

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.

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