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Proportionality EU VAT case law

30 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 2000 to 2026.

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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-321/25 Gidzhinov

Judgment · 15 October 2026 · Bulgaria

A 15-year absolute limitation period for serious VAT fraud and heavier penalties for organised crime groups

The Court holds that Article 325 TFEU and Article 2(1) of the PIF Convention do not preclude national legislation under which proceedings for serious fraud against the financial interests of the Union are time-barred if no final conviction is handed down within 15 years of the offence, whatever the interruptions, suspensions or unforeseeable events, provided that the period does not create a systemic risk of impunity in that Member State. Fraud of more than EUR 4 million is serious, and forming a criminal association to commit VAT offences is itself fraud against the Union's financial interests, as held in Taricco. Fifteen years in principle leaves enough time for a final judgment at three levels, and changes in the composition of a panel in isolated cases do not show a systemic risk. On the second question, the Framework Decision lays down minimum penalties only, so it does not prevent a Member State from punishing participation in an organised crime group more severely than the offences it aims at or with a maximum above five years, and ranges of 5 to 15 and 3 to 10 years are not disproportionate. The judgment applies the Lin line to an absolute limitation period that cannot be interrupted or suspended, and accepts it when it is long enough. It reaches criminal proceedings for large VAT fraud schemes and the national limitation rules that govern them.

T-356/25 Rapera

Judgment · 8 July 2026

Liability of the tax representative of a non-established taxable person

Article 204 does not preclude designating a representative as the person liable even where he takes no part in the taxable transactions, provided the taxable person has so designated him. Article 205, read with proportionality, does preclude joint and several liability of a representative not designated as person liable where involvement, knowledge and good faith cannot be examined. Which VAT identification number was used is not decisive. A person liable under Article 204 cannot simultaneously be jointly liable under Article 205. The dividing line is designation.

T-198/25 G Kft. (Adjustment of VAT after a tax inspection)

Judgment · 3 June 2026

Adjustment of VAT wrongly invoiced after a tax inspection

The Court answers that it does not. Such national legislation is compatible with EU law provided that the taxable person had, in real terms, a genuine opportunity and a reasonable period in which to adjust the VAT before the inspection was opened, during the inspection itself, or when challenging the decision closing it. The Court regarded it as relevant that the taxpayer had had several years in which to act and that there were no objective circumstances that had prevented it from doing so. The judgment confirms that the neutrality of VAT does not, on its own, override national procedural requirements where those requirements respect the principle of effectiveness and legal certainty.

C-544/24 Nekilnojamojo turto valdymas

Judgment · 30 April 2026

Proportionality of default interest on VAT arrears

The first question is inadmissible because Article 50 does not apply while the criminal proceedings are pending with no final conviction or acquittal. On the second, default interest on VAT arrears is preventive and compensatory, not punitive, so Article 49(3) does not apply, subject to verification by the referring court. Proportionality does not preclude a statutorily fixed rate with no power to reduce, disapply part, or remit outside exhaustively defined cases, including interest accruing during audit and litigation. Confirms that fixed statutory VAT default interest, without modulation for culpability or gravity, survives proportionality review, and that the absence of discretion is itself a safeguard of equal treatment and legal certainty.

T-638/24 Finanzamt Österreich (Intra-Community acquisition and supply – double taxation)

Judgment · 25 February 2026 · Austria

Article 41 taxation of intra-Community acquisitions alongside liability for VAT wrongly shown on the invoice

They do not preclude it. Articles 41 and 203 have distinct conditions and purposes and may apply simultaneously. The Dyrektor Izby Skarbowej w W. case is distinguished because there the supply had been definitively treated as non-exempt and taxed, whereas an Article 203 liability arises from the invoice alone, not from taxation of the supply, and can in principle be corrected. The second question was not examined. Businesses that quote the departure Member State's VAT number on cross-border purchases can face acquisition tax there under Article 41 even where the supplier has also been made liable for VAT wrongly shown on the invoice. Relevant to periods before Directive 2018/1910.

C-121/24 Vaniz

Judgment · 11 December 2025 · Bulgaria

Joint and several liability after the principal debtor has been struck off

Article 205 does not preclude it. Joint and several liability means each debtor owes the whole amount, so the disappearance of one co-debtor does not release the others, and allowing otherwise would let bad-faith debtors organise their own liquidation to defeat recovery. The qualification is that it must be established that the third party, when exercising its own right of deduction, knew or should have known that the VAT would not be paid, and the national limitation period must have been respected. Recipients cannot treat the striking off of a defaulting supplier as closing the file. Relevant to buyers in high-risk sectors such as transport and vehicle trading.

C-276/24 KONREO

Judgment · 10 July 2025 · Czechia

Concurrent denial of deduction and joint and several liability for the supplier's VAT

Article 205, read with proportionality, does not preclude the concurrent application of the two measures. Denial of deduction and joint and several liability pursue distinct, complementary objectives (combating evasion, efficient collection) and may be applied independently, without the authorities having to choose. Liability does not depend on whether the recipient paid or could deduct the VAT invoiced to it, nor on the prospects of a civil recourse claim against an insolvent supplier. The recipient must, however, retain the opportunity to show it took all reasonable precautions. Recipients in fraud chains, notably in fuel and other high risk commodity trading, face cumulative exposure.

C-733/23 Beach and bar management

Judgment · 3 July 2025 · Bulgaria

Cumulation of fines and sealing of premises for till receipt failures

Both national rules are precluded. Sealing plus an access ban is criminal in nature for Article 50 purposes because of its intrinsic severity, and it does not lose that character merely because it also serves a preventive aim, nor because it responds to 85 breaches taken together rather than one. Separately, a fine with a high statutory minimum, here nearly 200 times the VAT evaded per breach, breaches proportionality where the court cannot reduce or substitute it. Confirms and extends MV-98 to bulk offences.

C-278/24 Genzyński

Judgment · 30 April 2025 · Poland

Joint and several liability of company directors for VAT arrears

They do not preclude such a system, provided liability is confined to arrears arising during the director's term and to amounts unrecovered from the company, and provided the director can genuinely rebut the presumption by showing he exercised all due diligence in managing the company's affairs. The escape route must not be merely theoretical. But the mere fact that the exchequer was the company's sole creditor when permanent insolvency arose is not by itself a defence. Confirms Member States may attach personal VAT liability to directors on a rebuttable presumption of knowledge and influence, without proof of fraud or bad faith, following Herdijk.

C-164/24 Cityland

Judgment · 3 April 2025 · Bulgaria

Removal from the VAT register as a penalty for persistent non-compliance

Those provisions and principles preclude such legislation. Member States may, within their discretion under Articles 213 and 273, provide for removal from the VAT register, and the removal rules in Articles 363 and 369r concern only the special scheme numbers. But deregistration is a particularly severe penalty, close to a prohibition on trading, so it can only be imposed after a full examination of the nature and seriousness of the infringements, the taxable person's conduct, and the risk to revenue and fraud. Confirms that deregistration is available as an anti-fraud tool but only on a reasoned, individualised assessment, with lesser penalties considered first.

C-277/24 Adjak

Judgment · 27 February 2025 · Poland

Directors' joint and several liability and the rights of the defence

Exclusion of the potentially liable director from the company's assessment proceedings is permissible. At that stage liability is only a possibility, and participation could compromise confidentiality and delay collection. But the exclusion is lawful only if, in the subsequent joint and several liability proceedings, the director can effectively challenge the findings of fact and legal classifications made in the assessment proceedings and can access the tax authority's file, subject to the rights of others. Member States may keep assessment and derivative liability in separate tracks, but the second track must be a genuine opportunity to reopen the quantum and characterisation of the debt, not merely to test the statutory conditions of liability.

C-331/23 Dranken Van Eetvelde

Judgment · 12 December 2024 · Belgium

Joint and several liability for another trader's VAT fraud

Article 205 permits liability for the entire VAT debt, with no apportionment by degree of participation, provided the taxable person can show it took all reasonably required measures to ensure its transactions were not part of the fraud. The underlying presumption must be rebuttable. No account need be taken of the actual debtor's deduction right, since in fraud cases that right is refused anyway. Article 50 does not apply because conduct in different tax years is not the same facts, whatever national law says about a continuing offence. Confirms that Member States may collect the full VAT loss from any knowing or negligent participant in a chain fraud, without civil style apportionment. Relevant to wholesale distribution and any sector exposed to missing trader arrangements.

C-613/23 Herdijk

Judgment · 14 November 2024 · Netherlands

Director liability for unpaid VAT after failure to notify inability to pay

Article 273 does not preclude such a system, provided the director may rely on any circumstance showing the notification failure is not attributable to him, and not only force majeure. The possibility must not be purely theoretical. Nor is it precluded that liability attaches for one period while the director escapes liability for the immediately following period, because each notification period stands alone. Good faith and absence of fraud do not cure the missing notification. Confirms Member States may make company directors joint and several debtors for VAT under Article 273, extending Direktor na Direktsia (C-1/21) to procedural default. Relevant to directors and insolvency practitioners in the Netherlands and any Member State with comparable notification regimes.

C-657/22 Bitulpetrolium Serv

Judgment · 25 April 2024 · Romania

VAT on penalty excise duty for energy products reintroduced into a tax warehouse

Directive 2003/96 and the principle of proportionality preclude both practices. Energy products must be taxed according to actual use. Imposing the motor fuel rate as a penalty for breach of formal conditions, without allowing the operator to prove actual use, exceeds what is necessary to counter evasion. Although Article 78(1)(a) prima facie brings excise duty into the taxable amount, VAT on the additional excise duty is not due unless a taxable supply of the product for use as a motor fuel actually takes place. Relevant to fuel distributors, tax warehousekeepers and their advisers in Member States that convert documentary or notification breaches into the higher motor fuel excise rate.

C-341/22 Feudi di San Gregorio Aziende Agricole

Judgment · 7 March 2024 · Italy

Denial of deduction to "non-operating" companies

Status as a taxable person depends solely on whether an economic activity is actually carried on. It cannot be made conditional on output transactions exceeding a pre-set income threshold. Nor may deduction be refused on the ground that output transactions are insufficient. A volume-based presumption is unconnected to the criteria for establishing fraud or abuse and goes beyond what is necessary under Article 273. Deduction may still be refused where fraud or abuse is established on objective evidence, not by assumption. Italian companies caught by the Article 30 Law No 724/1994 shell company regime can challenge refusals of VAT credits, refunds, offsets and carry-forwards based purely on turnover falling short of the asset-based threshold.

C-519/22 MAX7 Design

Opinion of the Advocate General · 14 December 2023

Guarantee for another taxable person's tax debts and cancellation of the VAT number

Advocate General’s proposal, not a ruling. Advocate General Kokott proposes that Article 273, read with Articles 16 and 17 of the Charter, precludes such a guarantee set by reference to another taxable person's unpaid tax, absent any corporate link recognised under company law between the two taxable persons and absent any assessment of the risk or responsibility attributable to the taxable person itself. She also proposes that Article 47 precludes rules under which the guarantee decision cannot be challenged on the substance by its addressee and no appeal suspends the payment deadline.

C-1/21 Direktor na Direktsia Obzhalvane i danachno-osiguritelna praktika

Judgment · 13 October 2022 · Bulgaria

Joint and several liability of a company director for the company's VAT debts

Article 273 and proportionality do not preclude such liability where the person is a manager or member of an executive body, acted in bad faith in making hidden distributions or transferring assets free of charge or below market value, there is a causal link with the company's inability to pay VAT, liability is capped at the depletion of assets, and it arises only subsidiarily after recovery from the company fails. Default interest may be included, but only interest attributable to the bad faith acts. Article 205 does not apply. The PFI Convention does not either. Relevant to advisers on directors' personal exposure for corporate VAT arrears in Bulgaria and other Member States with similar derivative liability rules outside Article 205.

C-188/21 Megatherm-Csillaghegy

Order · 3 June 2022 · Hungary

Forfeiture of input VAT deduction on revocation of a tax identification number

Ruling by reasoned order under Article 99, the Court held that those provisions and the principles of neutrality and proportionality preclude such automatic forfeiture where the substantive conditions for deduction are met and the taxable person has not acted fraudulently or improperly. The qualification is that refusal remains possible where the breach of formal obligations prevents conclusive proof that the substantive conditions are satisfied, or where fraud or abuse is established by the authorities. The national court must verify these matters. Confirms Siemens Gamesa and Promexor Trade for pre-revocation periods. Relevant to advisers handling Hungarian deregistration cases and any businesses whose VAT numbers have been cancelled and later reinstated, including historic claims.

C-583/20 EuroChem Agro Hungary

Order · 21 October 2021 · Hungary

A minimum fine of 30% of 40% of the value of the goods for a transport declaration error

Ruling by order, the Court held that Article 273 and the principle of proportionality do preclude such legislation. Member States may impose obligations and penalties to ensure the correct collection of VAT and prevent evasion, but the sanction must not go beyond what is necessary. A fine with an absolute floor calculated on the value of the goods, without regard to the nature and gravity of the breach or to whether any revenue was lost, exceeds those limits. The third question referred was declared manifestly inadmissible for want of sufficient explanation. One of the clearest applications of proportionality to the reporting obligations that surround electronic freight monitoring.

C-868/19 Finanzamt für Körperschaften Berlin

Judgment · 15 April 2021 · Germany

Germany could not require every partner in a partnership to be financially integrated

The Court holds that Article 11 precludes such a condition. The anti avoidance power in the second paragraph of that article allows measures needed to prevent evasion or avoidance, but a blanket requirement of this kind applies irrespective of any risk of abuse and goes beyond what is necessary. It also treats partnerships less favourably than companies without objective justification. One of the series of German grouping cases that also produced Norddeutsche Gesellschaft fur Diakonie and Finanzamt T.

C-935/19 Grupa Warzywna

Judgment · 15 April 2021 · Poland

Proportionality of automatic VAT penalties

Article 273 and the principle of proportionality preclude such a penalty where it applies without distinction to an error of assessment by both parties as to the taxable nature of the transaction, absent any evidence of evasion or loss of revenue, and to cases where those circumstances are absent. Member States may still penalise wrongly claimed deductions. The defect is the automatic calculation, which leaves the authorities unable to adjust the amount to the individual circumstances. Neutrality was not examined. Relevant to anyone facing fixed-rate surcharges on disallowed input tax or overstated refunds, in Poland and in other Member States with automatic percentage penalties.

C-371/19 Commission v Germany (VAT refund – Invoices)

Judgment · 18 November 2020 · Germany

Germany could not reject refund claims without first asking for the missing invoices

The Court finds the infringement established. Rejecting such claims without first inviting the applicant to supply the copies, if necessary after 30 September, or to provide appropriate information, breaches the principle of fiscal neutrality and deprives the right to a refund of its practical effect. Germany infringed Articles 170 and 171 of the VAT Directive and Article 5 of Directive 2008/9. The action was dismissed as to the remainder. An important judgment for anyone running cross border refund claims.

C-835/18 Terracult

Judgment · 2 July 2020 · Romania

Correcting invoices after a final tax assessment where reverse charge applied

The Directive and those principles preclude such legislation or practice. Where the reverse charge applied, the supplier was never the person liable, no risk of loss of revenue arises (the recipient can deduct), and refusal to refund imposes a burden contrary to neutrality. Finality of the earlier assessment cannot bar correction while the five-year limitation period runs, particularly where the relevant facts emerged only after the assessment and the complaint window was days. Negligence may attract a penalty, but not outright denial of refund. Fraud or abuse would be different. Relevant to suppliers in reverse charge sectors (cereals, industrial crops and other Article 199a categories) and to anyone who has paid an assessment rather than appeal it.

C-653/18 Unitel

Judgment · 17 October 2019 · Poland

Export exemption where the actual customer is not identified

Such a blanket practice is precluded. Identification of the acquirer is not a condition of a supply of goods, which depends on the objective criteria of transfer of the right to dispose as owner and physical exit from the European Union. The exemption may nonetheless be refused where the failure to identify the acquirer prevents proof that those substantive conditions are met, or where the taxable person knew or should have known the transaction formed part of a fraud damaging the common VAT system. Fraud in a third country does not automatically exclude this. If refused, there is no taxable transaction and no input tax deduction. Exporters facing assessments because the invoiced customer turns out to be a front cannot be denied the zero rate on that ground alone. Relevant to electronics and other high risk export trades.

C-101/16 Paper Consult

Judgment · 19 October 2017 · Romania

Deduction refused because the supplier was declared an inactive taxpayer

The Directive precludes such rules where the refusal is systematic and final and leaves the customer no opportunity to show that there was no evasion or loss of tax revenue. Requiring a trader to make the straightforward check of the published list is a legitimate and proportionate anti-fraud measure. Failure to file returns is indicative of evasion but does not prove it. No limitation of temporal effects. The Romanian authorities could not claim good faith.

C-564/15 Farkas

Judgment · 26 April 2017 · Hungary

Reverse charge applied to the wrong transaction, deduction and penalty

Article 199(1)(g) applies only to immovable property sold by a judgment debtor in a compulsory sale. Deduction of VAT that was not due may be refused even though the seller paid it to the Treasury. The purchaser must seek reimbursement from the seller. But where that is impossible or excessively difficult, notably on the seller's insolvency, he must be able to claim directly from the tax authority. A 50% penalty for a purely administrative error causing no revenue loss appears disproportionate, subject to the national court's assessment. Confirms that domestic reverse charges cannot be extended beyond the categories listed in Article 199 without an Article 395 derogation, which is where national insolvency and auction regimes are exposed.

C-424/12 Fatorie

Judgment · 6 February 2014 · Romania

Deduction where reverse charge VAT is wrongly paid to the supplier

The right to deduct may be refused in those circumstances. This was not merely a formal invoicing defect. By paying the VAT to the supplier instead of accounting for it to the tax authorities, the recipient breached a substantive condition of the reverse charge regime, and deduction is available only for tax actually due. The supplier's insolvency does not alter that. The recipient's remedy is a civil claim against the supplier under national law. Legal certainty does not preclude revocation of an earlier favourable decision and reassessment with default interest within the limitation period, subject to proportionality. Confirms the limit of the Bockemühl and Ecotrade line. Relevant to construction and other domestic reverse charge sectors, where the remedy for a recipient is correction of the invoice rather than payment of tax shown in error.

C-527/11 Ablessio

Judgment · 14 March 2013 · Latvia

Refusal to assign a VAT identification number

A number may not be refused solely because the applicant lacks the material, technical and financial resources for the declared activity, or because its shareholder has repeatedly obtained numbers for companies that never traded and were then transferred. Such refusal requires objective factors amounting to sound evidence that the number will probably be used fraudulently, assessed overall. Those circumstances may feed into that assessment. Whether the evidence was sufficient is for the national court. Relevant to advisers handling start-up and pre-trading registrations, holding structures and businesses whose promoters have incorporated multiple entities.

C-588/10 Kraft Foods Polska

Judgment · 26 January 2012 · Poland

Acknowledgment of receipt of a credit note as a condition for reducing the taxable amount

The requirement is a condition within Article 90(1) and, in principle, neutrality and proportionality do not preclude it. It helps ensure correct collection, prevent evasion and avoid loss of revenue. But where obtaining the acknowledgment within a reasonable period is impossible or excessively difficult, the supplier must be allowed to prove by other means that he took all necessary steps to satisfy himself that the customer has and knows of the correcting invoice, and that the transaction was actually carried out on the corrected terms. Member States may condition credit note relief on customer acknowledgment, but cannot apply it rigidly where customers are under no legal duty to acknowledge.

C-177/99 Ampafrance and Sanofi

Judgment · 19 September 2000 · France

The French derogation blocking deduction on accommodation and entertainment is invalid

The Court declares the decision invalid. A derogation under Article 27 must be proportionate to the aim of preventing evasion or avoidance, and a blanket exclusion covering all such expenditure, including expenditure which is demonstrably incurred strictly for business purposes, goes beyond what is necessary. The Court declined to limit the temporal effects of its judgment. Decided together with Ampafrance, this is the leading authority on the limits of Article 395 derogations.

Related topics

Obligations of taxable persons · Fiscal neutrality · Persons liable for payment of VAT · Tax evasion and abuse · Origin and scope of right of deduction · Right of deduction · Legal certainty · Joint and several liability · Ne bis in idem · Measures to ensure the correct collection of VAT