Primacy of EU law EU VAT case law

5 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 2020 to 2025.

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Provisions these cases interpret most

Article 167 of Directive 2006/112/EC Origin and scope of right of deduction · 3 of these cases
Article 168 of Directive 2006/112/EC Origin and scope of right of deduction · 3 of these cases
Article 178 of Directive 2006/112/EC Rules governing exercise of the right of deduction · 3 of these cases
Article 273 of Directive 2006/112/EC Obligations of taxable persons and certain non-taxable persons · 2 of these cases
Article 47 of Directive 2006/112/EC Particular provisions · 1 of these cases
Article 2 of Directive 2006/112/EC Subject matter and scope · 1 of these cases
Article 12 of Directive 2006/112/EC Taxable persons · 1 of these cases
Article 9 of Directive 2006/112/EC Taxable persons · 1 of these cases

The 5 cases, most recent first

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-501/24 Klinka-Geo Trans

Order · 2 May 2025 · Hungary

Refusing deduction where the transaction never took place, without testing knowledge of fraud

Ruling by order, the Court held that the Directive does not preclude a refusal made without any examination of the recipient's knowledge where the authority establishes that the transaction did not take place. The knowledge test belongs to cases where a real transaction is tainted by fraud elsewhere in the chain, not to cases where there was no supply at all. The Court declared itself manifestly without jurisdiction on the second question and the fourth and sixth questions manifestly inadmissible, and confirmed that the national court must disapply directions it considers contrary to clear case law without needing to make a prior reference. The distinction it draws is the one that decides many Hungarian and Romanian disputes.

C-262/24 Pegazus Busz

Order · 12 February 2025 · Hungary

Evidence of fraud must be put to the taxable person, and a lower court may depart from binding directions

Ruling by order, the Court declared several of the questions manifestly inadmissible or answerable from existing case law. On the merits it held that Article 47 of the Charter requires the taxable person to have knowledge of, and to be able to debate on an adversarial basis before the national court, the evidence on which the administration relies to find participation in evasion. It further held that the primacy of EU law and Article 267 TFEU oblige the national court to set aside directions it considers contrary to EU law, without being required to make a preliminary reference first. Two points of real practical weight in fraud cases.

C-537/22 Global Ink Trade

Judgment · 11 January 2024 · Hungary

Due diligence and the burden of proof in denying deduction

A lower court must disregard higher court rulings inconsistent with the Court's interpretation, whether given by judgment or reasoned order. An obligation merely to give reasons for departing is permissible. Refusal for lack of diligence assessed by circular is allowed only if the authority still proves, by objective evidence, fraud and the taxable person's knowledge. No complex, far-reaching checks on counterparties may be required. The authority must follow its own circular, which must be unequivocal and foreseeable. Establishing a circular invoicing chain alone is insufficient. Fraud must be accurately described, though not every operator identified. Relevant to traders facing Hungarian (and comparable) deduction denials based on supplier unreliability or "passive fraud".

C-107/23 PPU Lin

Judgment · 24 July 2023

Limitation periods for VAT fraud, and the limits of a national standard of protection

The Court held that those provisions do not require the national courts to disapply case law of that kind where it flows from the principle that offences and penalties must be defined by law, as protected under national law in its requirements of foreseeability and precision, even though a considerable number of cases of serious fraud affecting the Union's financial interests will be discontinued as time-barred. Those provisions do, however, require the courts to disapply a national standard of protection relating to the retroactive application of the more lenient criminal law which permits the interruption of limitation to be called into question in such cases, including on appeals against final judgments. The principle of primacy precludes national legislation or practice binding ordinary courts to the decisions of the constitutional and supreme courts, at the risk of disciplinary liability, where they consider that case law contrary to directly effective EU law. The case sits at the junction between the duty to counter fraud affecting VAT-based own resources and the national constitutional guarantees surrounding criminal liability.

C-424/19 UR (Liability of lawyers to VAT)

Judgment · 16 July 2020 · Romania

Lawyers as taxable persons and the limits of res judicata

A person practising the profession of lawyer carries on an economic activity as a liberal profession and is a taxable person under Article 9(1). EU law precludes applying res judicata where the later dispute concerns a different tax period and a different subject matter and where applying the principle would stop the national court giving effect to the EU VAT rules. Finality is otherwise respected because EU law does not generally require a court to reopen definitive judgments. Confirms that lawyers and other liberal professions are within the VAT net.