VAT - refund request in another Member State - time limits - not fatal - Court of Justice C-746/22

Entrepreneurs can reclaim VAT in another Member State through a special online procedure. Dutch entrepreneurs who want to reclaim VAT in another Member State must register separately for this online procedure in the Netherlands. After receiving the login details, a refund request / procedure can be started. The refund request will be forwarded by the Dutch tax authorities to (for example) the German tax authorities, which will further process the content of the request. Strict deadlines apply. Failure to submit the refund application on time or the late submission of documents requested afterwards may result in the rejection of the refund application.

This was also experienced by an entrepreneur who had submitted a refund application in Hungary. The request had been submitted timely, but the Hungarian tax authorities had requested additional documents from the entrepreneur. Strict deadlines apply to the submission of these documents. The entrepreneur was unable to provide the requested documents on time, as a result of which the Hungarian tax authorities rejected the refund application. In the objection that followed, the entrepreneur still provided the requested documents. The Hungarian tax authorities took the view that this was no longer possible as the deadline for doing so had expired and could no longer be made up for in the objection procedure. The Court of Justice has now put a stop to this (case C-746/22). The Court of Justice has ruled that the entrepreneur must have the opportunity to submit the documents in the subsequent objection procedure. This is because the previously set deadline for the submission of the documents is not a (definitive) expiry period. It is therefore not possible to exclude those documents in subsequent proceedings. Remarkably, the Court of Justice had already reached the same conclusion in a similar case from 2019. Nevertheless, Hungary has once again tried to discourage entrepreneurs by making the refund application impossible on the basis of a formal attitude. It is therefore good to see that the Court of Justice has once again made it clear that deadlines are certainly not always fatal.

The handling of foreign refund applications is usually experienced as very formal by entrepreneurs. This sometimes leads to such requests no longer being submitted. In recent years, rulings in other similar cases have enabled the Court of Justice to provide more clarity on the (im)possibilities of Member States to accept or refuse refund applications. If you have any questions about this, or if you are currently having a discussion about a refund request, please do not hesitate to contact us.

If you have any questions about this topic or if you would like to discuss the topic further, please do not hesitate to contact us at info@vatpartners.com