Principles of effectiveness and fiscal neutrality EU VAT case law

6 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 2017 to 2025.

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Provisions these cases interpret most

Article 203 of Directive 2006/112/EC Persons liable for payment of VAT to the tax authorities · 3 of these cases
Article 183 of Directive 2006/112/EC Rules governing exercise of the right of deduction · 3 of these cases
Article 168 of Directive 2006/112/EC Origin and scope of right of deduction · 2 of these cases
Article 167 of Directive 2006/112/EC Origin and scope of right of deduction · 2 of these cases
Article 2 of Directive 2006/112/EC Subject matter and scope · 1 of these cases
Article 19 of Directive 2006/112/EC Supply of goods · 1 of these cases
Article 31 of Directive 2006/112/EC Supply of goods without transport · 1 of these cases
Article 178 of Directive 2006/112/EC Rules governing exercise of the right of deduction · 1 of these cases

The 6 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-640/23 Greentech

Judgment · 13 March 2025 · Romania

Deduction refused after reclassification as a transfer of a going concern

Deduction may be refused. The right to deduct exists only for tax actually due, so where the transaction is definitively outside the scope of VAT there is nothing to deduct, and the absence of any risk of revenue loss does not change that. The qualification is that a claim for reimbursement is distinct from a deduction claim. Where recovery from the seller is impossible or excessively difficult, neutrality and effectiveness require the buyer to be able to apply directly to the tax authorities for repayment. Where an acquisition is recharacterised as a transfer of a going concern, the point is not a deduction dispute but a direct repayment claim against the tax authorities, once recovery from the seller is time-barred or otherwise blocked. Relevant to asset deals and intra-group transfers of business assets, and to Member States whose rules rely solely on invoice correction plus a civil claim.

C-83/23 H GmbH (Direct right to a refund of VAT)

Judgment · 5 September 2024 · Germany

Limits of the direct claim against the tax authority for VAT wrongly invoiced

The recipient has no direct claim against the tax authority in those circumstances. Where the tax authority has already refunded the wrongly invoiced VAT to the supplier, it cannot be required to pay it a second time to the recipient, and the Reemtsma case law does not apply. The supplier's liquidation is irrelevant because that case law does not disturb the ranking of creditors, and the authority need not absorb the disruption to the normal refund chain. The direct claim remains an exception, available only where the recipient has exhausted its available remedies against the supplier. Recipients of invoices bearing the wrong Member State's VAT must act promptly against the supplier, including suing for a corrected invoice showing the VAT of the place of supply, before the supplier is refunded or dissolved. Relevant to cross-border leasing and sale and leaseback structures, and to anyone relying on HUMDA.

C-151/23 ZSE Elektrárne

Order · 5 October 2023 · Slovakia

Default interest on a late VAT refund and where the clock starts

Ruling by reasoned order, the Court confirmed that the taxable person is entitled to default interest where the credit is not repaid within a reasonable period. The detailed arrangements fall within the procedural autonomy of the Member States, framed by the principles of equivalence and effectiveness, but national rules on the starting point for the calculation must not have the effect of depriving the taxable person of adequate compensation for the loss caused by the late repayment. The companion to Kovozber on the same Slovak rule, and expressed in more general terms.

C-426/22 SOLE-MiZo

Order · 20 June 2023 · Hungary

Interest on wrongly withheld VAT credits must compensate for the passage of time

The Court holds that they do preclude that practice, in so far as it is liable to deprive the taxable person of adequate compensation for the loss caused by not having the sums available, and fails to offset the economic burden of the wrongly withheld tax. The interest must cover the whole period during which the taxable person was deprived of the money, up to actual payment. The third instalment of the Hungarian interest saga, after Delphi Hungary and the first Sole Mizo judgment.

C-397/21 HUMDA

Judgment · 13 October 2022 · Hungary

Direct claim against the tax authority for VAT invoiced in error by an insolvent supplier

Such national legislation is precluded where recovery from the supplier is impossible or excessively difficult due to liquidation and no fraud or abuse is attributable to either party, so there is no risk of revenue loss. Under Article 183, read with neutrality, interest is due if the refund is not made within a reasonable period after the request. The rules for calculating it are for national law, subject to equivalence and effectiveness and to giving adequate compensation. The VAT was not levied in breach of EU law, since Article 203 makes invoiced VAT payable. Confirms and extends Reemtsma beyond reverse charge and deduction disputes. Relevant to construction, events and other property related services where place of supply is misapplied, and to anyone holding claims against insolvent suppliers.

C-314/17 „Geocycle Bulgaria“

Order · 23 November 2017 · Bulgaria

The same VAT cannot be collected twice on a single supply under reverse charge

The Court holds that those principles do preclude such a refusal, in circumstances where national law provides no possibility of correcting the VAT once a tax adjustment decision exists. Collecting the tax twice on a single supply and denying deduction leaves the burden on the taxable person, contrary to neutrality, and the absence of any corrective mechanism makes the right to deduct impossible to exercise in practice. The order governs wherever a reverse charge has been mishandled and both parties have accounted for the tax.