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Legitimate expectations EU VAT case law

18 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 2001 to 2025.

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Under each case, what the Court decided, from its summary. The summaries are AI-generated and are not official documents: open the case for the Court’s own text.

C-475/24 Fashion TV RO and Maestro

Order · 12 November 2025 · Romania

Use of criminal evidence in deduction disputes after proceedings against directors are discontinued

By reasoned order under Article 99, the Court held that the national court must verify that the substantive and formal conditions for deduction are met and may, to that end, examine evidence obtained in earlier criminal proceedings against persons distinct from the taxable person, provided the rights guaranteed by EU law, notably equality of arms and the rights of the defence, are respected. Discontinuance of those proceedings is irrelevant. The ne bis in idem question was inadmissible. Directors are not the same person as the company. The legal certainty limb was inadmissible for inadequate reasons. Confirms that a discontinued or time-barred criminal case against directors gives a company no immunity in the parallel VAT assessment.

C-427/23 Határ Diszkont

Judgment · 1 August 2025

A refund handling fee is its own supply, and it is not a net amount

The Court held that the handling service is a distinct and independent supply and not part of a single supply with the goods, and that it is not covered by the exemptions relied on. The protection of legitimate expectations may be relied on against the tax authority where that authority had consistently treated such services as exempt and had not informed the taxable person of the change in the national legislation which, in its earlier version, expressly listed them among exempt activities. It is irrelevant in that context that the taxable person later received a non-binding reply, given after the event on a request for a ruling, stating that the services were ancillary costs sharing the treatment of the exempt principal transaction. Articles 73 and 78 preclude the practice of treating the amounts invoiced as the handling fee as net amounts not including VAT, where the supplier treated its supply as exempt and it is manifestly impossible for it to recover the VAT afterwards from the purchasers. The judgment separates two operations that a retailer performs in the same transaction with the same customer and gives them different treatment, and it does so without allowing the exemption on the goods to carry across to the service.

C-358/20 Promexor Trade

Judgment · 18 November 2021

Deregistration for VAT, continued trading, and the right to deduct that follows

The Court held that those provisions and principles do not preclude such national legislation, where the identification has been revoked because no taxable transactions were indicated in the returns filed for six consecutive months and the taxable person continues its activities notwithstanding the revocation, provided that the taxable person is able to re-register for VAT purposes and to deduct the input VAT paid. The Court added that the fact that the director of the taxable person is a partner in another company which is the subject of insolvency proceedings cannot, in itself, be relied on to refuse systematically the re-registration of that taxable person for VAT purposes. Identification is a formal requirement and not a substantive condition of the right to deduct, and the judgment keeps that distinction workable by making the compatibility of the national regime conditional on a real route back to registration.

C-846/19 Administration de l'Enregistrement, des Domaines et de la TVA

Judgment · 15 April 2021 · Luxembourg

Court-appointed guardianship services by a lawyer, economic activity and the welfare exemption

Such activity is economic where supplied for consideration, income is continuing and the overall remuneration is set on criteria intended to cover the supplier's operating costs. Lump sums, judicial appointment and third-party (State) payment are irrelevant. Protection of such adults in civil matters is closely linked to welfare work, but general legal, financial or advisory services are not. Lawyer status is not an a priori bar to recognition as devoted to social wellbeing. A court must grant it only if the Member State exceeded its discretion. Legitimate expectations do not bar assessment. Fees are treated as VAT-inclusive. Relevant to lawyers, social workers, associations and other professionals acting as court-appointed guardians, curators or deputies, and to their advisers.

C-628/16 Kreuzmayr

Judgment · 21 February 2018 · Austria

Ascribing the transport in a chain supply and deduction of wrongly invoiced VAT

The transport is ascribed to the second supply where the final purchaser obtained the right to dispose of the goods as owner before the transport began. Article 32 therefore applies to that second supply. The first supplier's misinformed classification and the intermediary's destination-State VAT number are irrelevant, because both the intermediary and the final purchaser knew the objective facts. VAT due only because it appears on an invoice is not deductible, and legitimate expectations cannot be invoked against a supplier. Recovery lies against the invoicing party under national law. Confirms that chain-transaction analysis rests on objective evidence known to the intermediary and final purchaser, not on the first supplier's treatment or the VAT number quoted. Relevant to commodity and fuel traders, distribution chains using collection numbers and ex works terms, and advisers reviewing invoicing positions in triangular sales.

C-251/16 Cussens and Others

Judgment · 22 November 2017 · Ireland

Direct application of the abuse of rights principle without national transposition

The prohibition of abuse is a general principle of EU law, not a directive provision, so it needs no transposition and may be applied directly to deny exemption, including to pre Halifax transactions. Legal certainty and legitimate expectations do not bar this and an abuser cannot invoke them. Tax on the remaining transactions must rest on national law, not the Directive. The essential aim is assessed by reference to the leases in isolation. An advantage is contrary to Article 13B(g) where the property was not actually used by owner or tenant before sale. Confirms that taxpayers cannot shelter behind the absence of a domestic GAAR. Relevant to anyone assessing historic new build disposal structures and to structures lacking commercial reality between connected parties.

C-332/14 Wolfgang und Dr. Wilfried Rey Grundstücksgemeinschaft

Judgment · 9 June 2016 · Germany

Change of partial exemption method and adjustment of deductions on mixed-use buildings

Member States are not obliged to require prior direct attribution of construction, acquisition, use, conservation or maintenance costs where such attribution is difficult in practice. The residual amount may then be apportioned by turnover, or by floor area if that gives a more precise result (it need not be the most precise possible). Article 20 requires adjustment of earlier deductions when a departing allocation key is adopted during the adjustment period. Legal certainty and legitimate expectations do not preclude this, even absent express adjustment or transitional rules. Confirms that a mid-period change of partial exemption method triggers adjustment for capital goods, including immovable property, and that taxpayers cannot rely on prior acceptance of a turnover key, even one endorsed by a supreme court, or on the absence of transitional rules. Relevant to property developers and landlords with mixed taxable and exempt lettings, and to advisers on sectorised or floor-area methods.

C-144/14 Cabinet Medical Veterinar Dr. Tomoiagă Andrei

Judgment · 9 July 2015 · Romania

Retroactive VAT assessment on veterinary services and duty to register a taxable person of the authority's own motion

Article 273 does not require registration of a taxable person's own motion on the basis of non-VAT returns. It is for the taxable person to declare commencement of activity under Article 213(1), and Member States retain discretion. Legal certainty and legitimate expectations do not preclude assessment within the limitation period, provided the rules are clear (removal from the exemption list suffices, VAT being of general application) and the authority's practice gave no precise assurances. Verification is for the national court. Confirms that a Member State's failure to police registration does not transfer the registration burden to the tax authority. Relevant to advisers dealing with retrospective assessments in newer Member States and with professions whose exempt status changed on accession.

C-183/14 Salomie and Oltean

Judgment · 9 July 2015 · Romania

Retrospective taxation of property sales and deduction before VAT registration

Retrospective assessment within the limitation period is permissible provided the national rules were clear and precise and the authority's practice gave no precise assurances creating a reasonable expectation of non-taxation. A mere non-systematic practice of not taxing such sales is not enough, especially for property professionals dealing on this scale. Surcharges must be proportionate, a matter for the national court. Deduction cannot be refused or deferred merely because the taxable person was not registered when the transactions were carried out. Relevant to property developers, joint ventures and unincorporated partnerships facing reclassification as taxable persons, and to advisers arguing legitimate expectations.

C-492/13 Traum

Judgment · 9 October 2014 · Bulgaria

Evidence required for intra-Community supply exemption

Refusal is precluded where the evidence supplied matches the list of documents prescribed by national law and was initially accepted by the authorities as establishing entitlement. Retroactive removal of the purchaser's VAT number cannot in itself defeat exemption. The national court must verify this, and exemption is lost if objective evidence shows the supplier knew or should have known of fraud by the purchaser and failed to take reasonable steps. Article 138(1) has direct effect. Confirms that suppliers relying on the national list of proofs, and on VIES data checked and accepted by the tax authority, cannot later be taxed because that authority invents additional requirements such as signature authentication or proof of the signatory's mandate.

C-572/11 Menidzherski biznes reshenia

Order · 4 July 2013 · Bulgaria

No deduction on invoices for transactions that never took place, even if the issuer paid the tax

The Court holds that they do not preclude such a refusal. The right of deduction is linked to the actual carrying out of the supply, and it does not extend to tax which is due solely because it appears on an invoice under Article 203. That the issuer paid the tax, so that no loss of revenue arises, does not change the position. The referring court must make a global assessment of the facts. The order marks the boundary of the substance over form case law.

C-642/11 Stroy trans

Judgment · 31 January 2013 · Bulgaria

Asymmetry between invoice issuer's liability and recipient's deduction

VAT entered on an invoice is payable by the issuer regardless of whether a taxable transaction exists, and no acknowledgement of a real transaction can be inferred from the mere absence of correction in a notice addressed to the issuer. Refusal of deduction to the recipient is not precluded by neutrality, proportionality or legitimate expectations. But where non-performance rests on fraud or irregularities of the issuer or upstream, it must be shown on objective factors that the recipient knew or should have known of the connection with fraud. Confirms that a supplier's unadjusted VAT assessment is only one evidential factor, not proof of supply, so recipients cannot rely on the tax treatment of their supplier to secure deduction. Relevant to fuel, commodity and other chain trading where authorities allege missing supplies from documentary gaps upstream.

C-107/10 Enel Maritsa Iztok 3

Judgment · 12 May 2011 · Bulgaria

Default interest on delayed refunds of excess VAT

Article 183 precludes retrospective extension of the refund period where it deprives the taxable person of an accrued right to default interest. It also precludes deferring the start of interest to completion of a tax investigation where the excess has already been carried forward for three tax periods. The option of posting cash security does not save that regime. A 45 day normal refund period is compatible. Refund by set-off is permitted, provided effective remedies exist to contest the debt relied on. Relevant to any business holding persistent VAT credits in Member States that suspend refund clocks during audits.

C-181/04 Elmeka

Judgment · 14 September 2006 · Greece

Exemption for services to sea-going vessels and the limits of legitimate expectations

The high seas requirement applies to all vessels covered by Article 15(4)(a), including those used for commercial, industrial or fishing activity. The Article 15(8) exemption applies only to services supplied directly to the shipowner and cannot be extended to earlier stages in the commercial chain. National tax authorities must respect legitimate expectations, but it is for the national court to decide whether the taxable person could reasonably have believed the ruling came from a competent authority. Confirms that intermediary supplies in bunkering chains are taxable.

C-376/02 'Goed Wonen'

Judgment · 26 April 2005 · Netherlands

Retroactive legislation withdrawing a property deduction adjustment

Because the amending law had already taken effect, retroactively, before the deduction was made, Articles 17 and 20 were not engaged, so Schlossstraße did not apply. The general principles do not preclude retroactivity granted exceptionally to prevent large scale use of contrived arrangements during the legislative process, provided operators were warned clearly enough to understand the consequences. Whether the risk justified retroactivity and whether the press releases were sufficiently clear are for the national court. Distinguishes cases where the deduction was already exercised before the legislative change (protected) from cases where the deduction is claimed after the retroactive effective date (not protected).

C-487/01 Gemeente Leusden and Holin Groep

Judgment · 29 April 2004 · Netherlands

Withdrawal of the option to tax property lettings and capital goods adjustments

Withdrawal of the option is permitted and may carry with it adjustment of deductions on let immovable property under Article 20(2), which is not an exhaustive list and covers legislative change. Adjustment may arise from circumstances outside the taxpayer's control. The Member State must, however, respect legitimate expectations in the implementing arrangements, though repeal of advantageous legislation is not in itself a breach. Article 5(7)(a) concerns application of goods for business purposes and cannot be used for such a legislative withdrawal. Landlords and developers who deducted input VAT on the basis of an opted-to-tax letting cannot resist adjustment merely because the option was removed by law rather than by their own choice. Relevant to property funds, local authority sports and leisure lettings, and sale-and-leaseback style structures relying on the option.

C-62/00 Marks & Spencer

Judgment · 11 July 2002 · United Kingdom

Retroactive curtailment of the period for reclaiming overpaid VAT

Such retroactive curtailment is incompatible with both effectiveness and legitimate expectations. A three year limitation period running from payment is itself reasonable, and a Member State may shorten the period, but only if the new legislation includes transitional arrangements giving an adequate period after enactment to bring claims that were available under the old rules. Budgetary planning does not justify otherwise. Correct implementation does not exhaust a directive's effects. Taxable persons may still rely on Article 11A(1) where full application is not in fact secured. The reference point for any legislated shortening of a domestic VAT repayment window. Relevant to advisers running historic overpayment claims following a Court ruling, and to assessing national capping and limitation provisions generally.

C-83/99 Commission v Spain

Judgment · 18 January 2001 · Spain

Reduced rate for motorway tolls

Spain infringed Article 12(3)(a). Reduced rates are an exception to the standard rate and Annex H must be construed strictly and according to the ordinary meaning of its wording. Providing road infrastructure for a toll is not the provision of a means of transport. It merely allows users with their own vehicle to travel in better conditions, so it is outside category 5. Divergent treatment in other Member States is irrelevant, and a Member State cannot rely on legitimate expectations against an objective finding of infringement. Confirms that tolls for road, tunnel and bridge infrastructure operated by private concessionaires are standard rated, and that infrastructure access is not passenger transport for reduced rate purposes. Relevant to concession operators, and more widely to any argument that an Annex III (formerly Annex H) category can be read functionally or by analogy.

Related topics

Right of deduction · Origin and scope of right of deduction · Supply of services · Legal certainty · Adjustment of deductions · Rules governing exercise of the right of deduction · Supply of goods or services · Supply of goods · Transactions concerning deposit and current accounts · Exemptions on importation and exportation