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Recovery of undue payment EU VAT case law

10 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 2012 to 2024.

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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-741/22 Casino de Spa and Others

Judgment · 12 September 2024 · Belgium

VAT exemption for online lotteries but not other online gambling

Differentiated treatment is permissible provided objective differences (chance alone determining winners, the waiting period, stakes and odds, cultural factors) considerably influence the average consumer's choice. The identity, legal form, licence category, regulatory regime and legislative objectives of providers are irrelevant. National courts must disapply provisions incompatible with Article 135(1)(i), a constitutional court's maintenance of effects being irrelevant. Tax wrongly levied is refundable unless refund unjustly enriches the taxable person. No damages equivalent to the VAT paid on unlawful State aid grounds. Relevant to gambling operators in Member States that split the exemption by game type.

C-73/23 Chaudfontaine Loisirs

Judgment · 12 September 2024 · Belgium

VAT exemption for online gambling and the limits of national discretion

Differentiating between online non-lottery gambling and lotteries or offline gambling is compatible with Article 135(1)(i) and neutrality, provided the objective differences are liable to have a considerable influence on the average consumer's choice. That is for the national court to verify. Article 135(1)(i) has direct effect, so a constitutional court's decision to maintain the effects of annulled provisions is irrelevant and they must be disapplied. Refund of VAT levied in breach is due, unless it would unjustly enrich the taxable person. Operators of online casino and betting products in Member States that tax electronic gambling while exempting lotteries and land based play now have a harder neutrality argument. Relevant to gambling advisers and to anyone litigating retrospective effects of annulled tax legislation.

C-532/23 Lear Corporation Hungary

Order · 10 April 2024 · Hungary

Late payment interest on VAT refunds withheld under an unlawful national condition

By reasoned order under Article 99, the Court held that Article 183 does not preclude national law from treating a refund claim as including an interest claim. The authority may confine itself to the period stated in a timely interest claim. However, it may not treat a second claim as new and time-barred where it concerns interest on VAT retained through the same breach of EU law and the taxpayer only learned of the wider period from a later national decision following a Court ruling. Such a claim supplements the first. Relevant to taxpayers pursuing interest on VAT withheld under national conditions later found incompatible with EU law, particularly the long-running Hungarian "paid consideration" claims.

C-674/22 Gemeente Dinkelland

Judgment · 22 February 2024 · Netherlands

Interest on VAT refunded after the taxable person's own errors

No interest is required from the date of payment. VAT levied on the basis of the taxable person's own return is not levied in breach of EU law merely because errors in its accounts meant the deduction right was not fully exercised. A retroactive change of allocation method gives rise to interest only if the original method was incompatible with EU law because of national legislation or a tax authority requirement. Here the key was set under the taxable person's sole responsibility. Under Article 183, an eight week processing period is not unreasonable. Distinguishes refunds triggered by unlawful national rules or authority insistence, which carry interest from payment, from refunds triggered by the taxable person's own errors or freely chosen methodology, which do not.

C-453/22 Schütte

Judgment · 7 September 2023 · Germany

Direct claim against the tax authorities for VAT overcharged by suppliers

The Directive and those principles require that the purchaser be able to claim reimbursement directly from the tax authority. Where the purchaser is guilty of no fraud, abuse or negligence and recovery from the suppliers is impossible or excessively difficult, here because of limitation, a direct claim against the tax authorities must be available, with default interest if reimbursement is not made within a reasonable time. Supplier insolvency is only one example of impossibility. The double refund risk is excluded. Suppliers who first invoked limitation and then sought repayment would be acting abusively. Confirms that Reemtsma style direct claims are not confined to insolvent suppliers.

C-13/18 Sole-Mizo and Dalmandi Mezőgazdasági

Judgment · 23 April 2020 · Hungary

Interest on excess deductible VAT withheld in breach of EU law

The base rate approach fails effectiveness and fiscal neutrality where that rate is below what a taxable person other than a credit institution would pay to borrow the same amount, and where interest stops at the end of the reporting period with nothing to compensate for monetary erosion until actual payment. However, a five-year limitation period running from entry into force of the corrective legislation is compatible, as is requiring a specific request for default interest, which then runs only from expiry of the 30 or 45 day processing deadline. Businesses holding historic interest claims against Member States for VAT withheld contrary EU law now have a benchmark. Relevant to Hungarian claims and to comparable interest disputes elsewhere.

C-120/15 Kovozber

Order · 21 October 2015 · Slovakia

Interest on a delayed VAT refund cannot wait for the tax inspection to end

Ruling by reasoned order under Article 99 of the Rules of Procedure, the Court held that Article 183 does preclude such legislation. Member States retain procedural autonomy over the arrangements for repayment, but those arrangements must not make the taxable person bear, even in part, the financial burden of the tax. Where repayment is not made within a reasonable period, the losses caused by the unavailability of the sums must be compensated by default interest, and a rule tying the start of interest to the end of an inspection defeats that requirement. Part of the settled line running through Enel Maritsa Iztok, Delphi Hungary and Rafinăria Steaua Română.

C-654/13 Delphi Hungary Autóalkatrész Gyártó

Order · 17 July 2014 · Hungary

Interest on VAT locked up by a national condition contrary to EU law

Ruling by reasoned order, the Court held that EU law precludes such rules and practice. In the absence of EU legislation on the point it is for national law to lay down the arrangements for paying the interest, in compliance with the principles of equivalence and effectiveness. They must be no less favourable than those governing similar domestic claims and must not make the exercise of EU rights practically impossible or excessively difficult, which the referring court must verify. National courts must, if necessary, disapply any national provision that conflicts with EU law. The link in the chain that matters where a national condition has already been condemned: striking down the condition is not enough, because the taxpayer has financed the State in the meantime.

C-191/12 Alakor Gabonatermelő és Forgalmazó

Judgment · 16 May 2013 · Hungary

Refusal to repay VAT already covered by subsidy

The repayment principle does not preclude refusal to repay the part of the VAT that was subsidised by aid, but only if the economic burden of the deduction refusal has been completely neutralised, which the national court must verify. The test is whether the aid would have been lower had deduction been allowed. Repayment must equal the blocked VAT less any excess aid attributable to it. The source of the funding, EU or national, is irrelevant. Relevant to recipients of grant funding where national rules formerly restricted deduction on subsidised acquisitions, and to advisers running historic recovery claims in Hungary and comparable regimes.

C-591/10 Littlewoods Retail and Others

Judgment · 19 July 2012 · United Kingdom

Interest on VAT overpaid in breach of EU law, simple or compound

A taxable person who has overpaid VAT collected in breach of EU law has an EU law right to reimbursement of that tax and to interest on it. The method is left to national law, which decides between simple interest, compound interest or another type, subject to effectiveness (the taxpayer must not be deprived of adequate indemnity for the loss) and equivalence (no less favourable treatment than comparable domestic claims). The national court must verify compliance and may choose among the appropriate domestic procedures. Confirms that the entitlement to interest on overpaid VAT is grounded in EU law itself, not merely national statute, but that compound interest is not mandated. Relevant to retailers and others with long running Fleming style claims, and to whether statutory interest caps or exclusions of common law remedies can be challenged.

Related topics

Refund of VAT · Fiscal neutrality · Unjust enrichment · Obligation of good faith · Direct effect · Betting, lotteries and gambling · Exemptions · Rules governing exercise of the right of deduction · Right of deduction · Refund of excess VAT