Case law
30 May 2019

Failure to meet the deadline for providing additional information to application for VAT refund

The Court of Justice of the EU released judgment, in which it dealt with a question, whether the period of one month to provide additional information to application for VAT refund represents a mandatory time-limit, failure to meet of which would result in losing the right for VAT refund.

Elvíra Ungerová

The company Sea Chefs Cruise Services GmbH, a company established in Germany, requested refund of French VAT through an electronic portal made available for this purpose in Germany. The German tax authorities have electronically forwarded the application to the French tax authorities.

The French tax authorities requested additional information from the mentioned company. As the company did not respond within the one-month deadline set, the tax authorities rejected their VAT refund claim.

The Court of Justice of the European Union (“CJEU”) in its judgement in the case C‑133/18 „Sea Chefs Cruise Services GmbH“ released on 2 May 2019 has reminded that the right of a taxable person established in an EU member state to obtain the refund of VAT paid in another EU member state, in the manner governed by Directive 2008/9/EC, is the counterpart of such a person’s right established by the VAT Directive (Directive 2006/112/EC) to deduct input VAT in his own EU member state.

The deduction system, and accordingly the refund system, is an integral part of the VAT scheme and in principle may not be limited. In particular, the right to deduct is exercisable immediately in respect of all the taxes charged on input transactions. The common system of VAT therefore ensures neutrality of taxation of all economic activities, whatever their purpose or results, provided that they are themselves, in principle, subject to VAT.

As regards the provision determining the deadline for providing additional information to the application for VAT refund filed, it is clear from its wording alone that it does not indicate whether or not the period referred to is a mandatory time-limit. According to CJEU, it can, however be deduced from the context in which it stands in Directive 2008/9 that it does not have a binding character.

The EU member state of refund shall be provided with the additional information requested within one month of the date on which the request reaches the person to whom it is addressed. In contrast to the provision determining the time-limit for filing the application for VAT refund, which is at the latest on 30 September of the calendar year following the refund period, the provision governing the time-limit for providing additional information, does not contain the words 'at the latest'. CJEU argued that absence of those words indicates that the EU legislature did not seek to set a mandatory time-limit in this provision.

CJEU considered also the fact that the application for VAT refund must be filed by the taxable person (applicant) while additional information can be requested also from someone other than the applicant or a competent authority of an EU member state.

In that case, the absence of a reply or a late reply from that other person or from that authority would result in the taxpayer losing the right to a refund of VAT, even though he would have no way of influencing the submission of a reply. This would be contrary to the fundamental principles of the common system of VAT.

CJEU concluded that the period of one month to provide additional information to the application for VAT refund from another EU member state, requested by that EU member state, does not constitute a mandatory time-limit.

Hence, if the applicant exceeds or fails to meet the deadline, he is still able to submit, before the national court, additional information suitable for proving the existence of his right to a refund of VAT.

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