Judgment;Summary — ECLI:EU:C:2021:723
Date: 2021-09-09
Language of the case: Spanish
Court formation: Tenth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Spain

Summary C-294/20 — 1 
Case C-294/20 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
1 July 2020 
Referring court:  
Audiencia Nacional (Spain) 
Date of the decision to refer:  
5 March 2020 
Applicant:  
GE AUTO SERVICE LEASING GMBH 
Defendant:  
Tribunal Económico Administrativo Central 
  
Subject matter of the main proceedings 
This request for a preliminary ruling concerns the determination of the deadline by 
which a taxable person must establish fulfilment of the conditions for entitlement 
to a refund of value added tax (‘VAT’) and of the time when, as a consequence of 
any negligence or abuse on his part, a taxable person loses the right to such a 
refund. 
Subject matter and legal basis of the request for a preliminary ruling 
The present request for a preliminary ruling concerns the determination of 
whether a court must examine documents submitted out of time by a non-
established taxable person to substantiate its right to a refund of VAT, contrary to 
the requirements laid down in Articles 3 and 7 of Directive 79/1072 and the 
annexes thereto, and in Articles 15, 8 and 9 of Directive 2008/9, and in 
contravention of the case-law of the Court of Justice in that regard. 
If those documents must be examined, it would mean that the non-established 
taxable person (and, consequently, any taxable person) would not be subject to 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-294/20 
 
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any time limit for establishing compliance with the conditions for entitlement to a 
refund and would be able to furnish the supporting evidence whenever and 
however it wished, even where it had failed to furnish such evidence after having 
been required to do so by the administrative authority, as long as there is no 
allegation of bad faith or abuse of rights against that taxable person.  
That would make it impossible to administer VAT, thereby infringing the 
principle of neutrality of the tax system and affecting the uniform nature of VAT 
throughout the EU.  
Questions referred for a preliminary ruling 
l. Must it be accepted as lawful for a taxable person, following repeated requests 
from the tax authority that it establish compliance with the conditions for 
entitlement to a refund, to fail to comply with those requests without any 
reasonable justification and, after it has been refused a refund, for that person to 
defer the submission of documents until the review procedure or legal action? 
2. Can a situation where a taxable person does not provide the tax authority with 
the necessary information on which it bases its right when it has been permitted 
and formally required to do so, and that taxable person fails to provide that 
information without reasonable justification and the information is instead 
submitted voluntarily at a later date to a review body or a court, be regarded as an 
abuse of rights? 
3. Does a non-established taxable person, either on the ground that it failed to 
submit the relevant information for establishing its right to a refund on time and 
without reasonable justification, or on the ground that it engaged in abusive 
practices, lose its right to a refund once the period stipulated or granted for that 
purpose has elapsed and the tax authority has issued a decision refusing the 
refund? 
Provisions of EU law cited 
Article 267 TFEU. 
Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for 
the refund of value added tax, provided for in Directive 2006/112/EC, to taxable 
persons not established in the Member State of refund but established in another 
Member State: in particular, Article 5, second paragraph, and Articles 8, 9 and 15. 
Eighth Council Directive 79/1072/EEC of 6 December 1979 on the harmonization 
of the laws of the Member States relating to turnover taxes — Arrangements for 
the refund of value added tax to taxable persons not established in the territory of 
the country (now repealed): in particular, Articles 3 and 7 and Annexes A and C. 
GE AUTO SERVICE LEASING 
 
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Council Directive 2006/112/EC of 28 November 2006 on the common system of 
value added tax: Article 170. 
Case-law of the Court of Justice. 
Provisions of national law cited 
Article 119 of Ley 37/1992 del Impuesto sobre el Valor Añadido (Law 37/1992 
on Value Added Tax; ‘LIVA’) of 28 December 1992: in particular, paragraphs 2, 
3, 4 and 9. 
Article 57 of Reglamento General de desarrollo de la Ley General Tributaria en 
materia de revisión en vía administrativa (General Regulations for the 
implementation of the General Tax Law in relation to administrative review; 
‘RGRT’) (Real Decreto (Royal Decree) 520/2005). 
Brief summary of the facts and procedure  
1 On 30 June 2006 and 29 June 2007, GE AUTO SERVICE LEASING GMBH 
filed applications for a refund of input VAT paid by traders or professional 
practitioners not established in the territory of application of the tax for the 2005 
and 2006 financial years in the amount of EUR 407 396.469. 
2 On 19 March 2008, the department dealing with VAT for non-established taxable 
persons of the Oficina Nacional de Gestión Tributaria (National Tax 
Administration Office) issued two formal requests for the company to provide 
documents. 
3 On 12 December 2008, the company expressed its intention to comply with the 
requests but indicated that, since those requests concerned a non-resident 
company and in the light of the difficulty in presenting the required documents, it 
was unable to comply with those requests even though it had expressed its 
intention to do so. 
4 On 18 February 2009, the Oficina Nacional de Gestión Tributaria gave decisions 
refusing the applications for a refund; those decisions were essentially based on 
the applicant’s failure to comply with the requests for documents and were 
notified to the company on 21 April 2009. 
5 On 20 February 2009 (after the refusal decisions were adopted but before those 
decisions were notified), the company submitted two documents, one for each 
financial year, in which it stated that the company concerned was German, that its 
activity was the supply of cars to Spanish undertakings through leasing contracts 
and occasional sales of cars on the Spanish used car market, that it operated in the 
territory of application of the tax without a permanent establishment and that it 
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paid input VAT on purchases of vehicles, in which connection it provided a 
number of supporting invoices. 
6 GE AUTO SERVICE LEASING GMBH filed a request for review of the 
decisions refusing to grant the refunds. Whilst acknowledging the delay, GE 
AUTO SERVICE LEASING GMBH argued that it had replied to the requests of 
20 February 2009 before notification of the decisions refusing its request for a 
refund. In addition, it lodged with the applications initiating the review 
proceedings a sample of invoices issued in respect of the leasing services 
supplied, emphasising the company’s operations in relation to the provision in 
Spain of that category of services. 
7 Before deciding on the review proceedings, the Oficina Nacional de Gestión 
Tributaria issued a fresh request to the company on 13 July 2009 for clarification 
of a number of matters. No reply was ever received to that request, which was 
notified to GE AUTO SERVICE LEASING GMBH on 21 July 2009. 
8 On 1 February 2010, the Oficina Nacional de Gestión Tributaria adopted a 
decision dismissing the review proceedings and confirming the refusal to grant the 
refund in the light of failure by the company to establish compliance with the 
conditions laid down by law and submit documents in that connection. 
9 The applicant disagreed with that decision and lodged administrative complaints 
with the Tribunal Económico-Administrativo Central (Central Tax Tribunal, 
Spain; ‘TEAC’), annexing to those complaints a number of documents: invoices 
for the provision of services and financial leasing contracts, official certificates 
issued by the German authorities confirming its status as a taxable person with a 
right of deduction, and a number of periodic VAT returns. The TEAC joined the 
complaints. 
10 On 24 January 2013, the TEAC gave judgment dismissing the administrative 
complaints. The TEAC upheld the view of the administrative body and stated that 
the relevant evidence for proper regularisation of the tax situation had to be 
submitted to the competent administrative body, expressing the view that the 
administrative complaint procedure is not the appropriate time for that task, and 
stating that the evidence should be submitted as part of the tax collection 
procedure. 
11 On 24 January 2013, GE AUTO SERVICE LEASING GMBH brought an action 
before the Sala de lo Contencioso-Administrativo (Chamber for Contentious 
Administrative Proceedings) of the Audiencia Nacional (National High Court, 
Spain), against the judgment given against it by the TEAC and arguing that: (i) the 
restrictive approach of the review body undermined the applicant’s rights of 
defence; (ii) the evidence in the case file and the evidence adduced with the 
application establish the applicant’s right to obtain a refund of input VAT paid; 
(iii) the principle of neutrality of the tax has been breached; and (iv) if the 
disputed restrictive approach is upheld, the clock should be turned back to the 
GE AUTO SERVICE LEASING 
 
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proceedings before the administrative body in order to give the company the 
opportunity to rectify its failure to submit evidence. 
12 The legal action was dismissed in full by judgment of 22 September 2016, which 
essentially reiterated the TEAC’s approach regarding the burden of proof. The 
judgment stressed that non-established businesses or professional persons are 
entitled to assert the right to a refund of VAT but the burden of proof in relation to 
the conditions required for application of that right lies with them. Non-
compliance with requests at the procedural stage cannot be rectified before the 
courts or at the administrative review stage. 
13 The company brought an appeal on a point of law against that judgment. 
14 The appeal was upheld in full by judgment of the Tribunal Supremo (Supreme 
Court, Spain) of 10 September 2018, which set aside the judgment of the TEAC of 
24 January 2013 dismissing the (joined) administrative complaints lodged against 
the unfavourable decisions on the requests for review filed against the two 
decisions of 18 February 2009, which were adopted by the Oficina Nacional de 
Gestión Tributaria and in which the company concerned was refused the right to 
the refund claimed. The Tribunal Supremo (Supreme Court) also ordered that the 
clock be turned back to the time when the judgment under appeal was given so 
that another judgment could be given in which, in the light of the evidence 
admitted in the proceedings, the Audiencia Nacional (National High Court) would 
rule on compliance with the substantive conditions for entitlement to the refund 
requested by GE AUTO SERVICE LEASING GMBH and, in the event of 
compliance, would expressly grant that refund. 
Main arguments of the parties to the main proceedings 
15 Despite their quasi-judicial nature, the Tribunales Económico-Administrativos 
(Tax Tribunals; ‘TEAs’) are administrative bodies and recourse must be had to 
them before an action can be brought before the contentious administrative courts. 
Although TEAs are administrative bodies, administrative complaint proceedings 
are similar to court proceedings. TEAs have important powers in relation to the 
right to adduce evidence, dealing with submissions and the obligation to resolve 
all the issues whether or not these were raised by the parties. 
16 As regards evidence, Article 57 of the RGRT provides that TEAs may refuse to 
hear evidence requested or adduced only where that evidence relates to facts 
which have no bearing on the decision concerning the forms of order sought in the 
complaint, and it also provides that TEAs may order the submission of evidence 
which was previously refused and authorises them to request as many reports as 
they consider to be necessary or appropriate for ruling on the complaint. 
17 In line with its earlier rulings, the Tribunal Supremo found in its judgment on the 
appeal that ‘there is absolutely no reason why a taxpayer who failed to submit 
certain evidence forming the basis for his claim during the inspection procedure 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-294/20 
 
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should not submit that evidence later in court proceedings …’ and that the 
claimant may present before the tax tribunals evidence that it did not present 
before the tax administration bodies, provided that rights are asserted in 
accordance with the requirements of good faith, while the law does not protect the 
abuse of rights. Abusive or malicious conduct must be duly identified in the 
relevant proceedings and be of such an intensity that it justifies a penalty 
consisting of refusal to examine the merits of the claim brought, but there is not 
the slightest allegation in these proceedings that the appellant acted in bad faith or 
committed an abuse of rights. The Tribunal Supremo acknowledged that it is the 
person seeking the refund who must establish that the substantive conditions of 
the right claimed have been met. In any event, the requirements of the 
administrative authority for holding that the right to a refund has been established 
may not be disproportionate, excessive or unnecessary. 
18 Since the Tribunal Supremo upheld the appeal, the judgment under appeal — in so 
far as it dismissed the legal action on the sole ground that it was not possible, in 
the administrative review proceedings, to adduce or rely on evidence not adduced 
or relied on in the procedure for collection of the taxes concerned — was set 
aside, along with the decision of the TEAC. 
Brief summary of the reasoning in the request for a preliminary ruling 
19 In compliance with the operative part of the judgment of the Tribunal Supremo of 
10 September 2018, the Audiencia Nacional (National High Court) must give 
another, fresh judgment, replacing the judgment set aside, in which all the 
documents filed by the company, both at the review stage before the TEAC and 
the documents adduced as evidence before the court, must be examined in order to 
determine whether the company is entitled to a refund of input tax paid as an 
entity not established in the territory of application of the tax in the financial years 
2005 and 2006, in the amount of EUR 407 396.469. 
20 The core reason on which the Tribunal Supremo based its decision concerns the 
importance of TEAs as administrative review bodies, which requires them to 
examine all the evidence that they have deemed relevant, whether or not that 
evidence was presented by taxpayers to the administrative body and irrespective 
of the fact that the tax collection procedure requires them to fulfil that obligation 
vis-à-vis the administrative body of the tax authority. However, even though the 
breach of law lies in the first instance in the decision of the TEAC, the Tribunal 
Supremo also held that the judgment of the Audiencia Nacional confirming the 
approach of the TEAC was not lawful. The Tribunal Supremo found that all the 
documents submitted to the TEAC and the chamber of the Audiencia Nacional 
must be examined, despite the failure to comply with the formal requests sent by 
the tax authority to the undertaking when it commenced its claim for a refund. 
21 In that examination of evidence, there is a presumption that all the documents 
provided by GE AUTO SERVICE LEASING GMBH in the proceedings before 
GE AUTO SERVICE LEASING 
 
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the TEAC and in the contentious administrative action are compatible with the 
refund mechanism laid down in respect of VAT. However, the Audiencia 
Nacional takes the view that, if it proceeds to comply strictly with the terms of the 
judgment of the Tribunal Supremo, it is highly likely to infringe the requirements, 
conditions or limits laid down for the refund of input tax paid by non-established 
persons in Article 7 of Directive 79/1072/EEC, a very similar provision to 
Article 15(1) of the current Directive 2008/9, and to diverge from the case-law of 
the Court of Justice on that subject. The Audiencia Nacional considers that the 
company did not adduce evidence or establish that the substantive requirements 
for its entitlement to a refund were met when it should have done so in accordance 
with the provisions in force of the directive, and, in particular, when it was 
required to do so and was given the opportunity to do so repeatedly by the tax 
authority. The Audiencia Nacional cannot disregard the EU legislative provisions 
or the case-law of the Court of Justice when complying with the judgment of the 
Tribunal Supremo. 
22 The Audiencia Nacional describes the tax authority’s conduct as beyond reproach. 
Faced with an incomplete application, it allowed the taxable person to furnish all 
the documents required for its claim for a refund to proceed. There was 
compliance with both the General Tax Law and Article 41(2) of the Charter of 
Fundamental Rights of the European Union, now enshrined in Article 6(1) of the 
Treaty on European Union. The incomplete supporting documents submitted by 
the applicant made it impossible for the tax authority to check that the full amount 
sought by way of a refund was reflected in the invoices, types of transaction and 
persons for whom the transactions from which it derived its right to a refund were 
carried out. The Audiencia Nacional points out that the tax authority adopted the 
refusal decision on the basis of the information available to it and was unable to 
confirm that all the conditions for entitlement to a refund had been fulfilled. 
23 The case-law of the Court of Justice has pointed out, in essence, that the right of 
taxable persons to deduct input VAT owed by them constitutes a fundamental 
principle of the common system of VAT. A deduction system, and consequently a 
refund system, must be set up for the purpose of completely releasing businesses 
from the burden of VAT due or paid on all their economic activities. The common 
system of VAT must guarantee neutrality with respect to the tax burden on all 
economic activities, whatever their aim or outcome, where those activities are 
subject to VAT. 
24 The right of a taxable person established in a Member State to obtain a refund of 
VAT paid in another Member State, in the manner governed by Directive 2008/9 
and Directive 79/1072/EEC, is the counterpart of such a person’s right established 
by Directive 2006/112 to deduct input VAT in his own Member State, as is clear 
from the judgments of the Court of Justice of 25 October 2012, Daimler and 
Widex, C-318/11 and C-319/11, EU:C2012:666, paragraph 41, and of 21 March 
2018, C-533/16, paragraph 36. 
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25 The fact that there is no substantive difference between the right of deduction of 
non-established persons and that of taxable persons within their own Member 
State makes the reply which the Court gives more important. Since the same 
rationale underlies the right to a refund of an established taxable person and that 
of a non-established taxable person, the only differences are procedural 
differences; if the approach of the Tribunal Supremo is correct, it must be 
accepted that it is possible for a taxable person to produce documents 
substantiating his right at any time, including after the administrative body has 
adopted its decision, without any temporal limit and irrespective of the actions of 
the authority and the individual. 
26 In general terms, for the right to a refund to arise, a taxable person must hold an 
invoice drawn up in accordance with Articles 220 to 236 and Articles 238 to 240 
of Directive 2006/112 (judgment of the Court of Justice of 19 October 2017, 
Paper Consult, C-101/16, EU:C:2017:775, paragraph 40). 
27 In principle, the procedural requirements may not constitute an impediment to the 
full deduction of tax. Whilst it is the case that, under Article 22(8) of the Sixth 
Directive, the Member States may lay down other provisions for the correct 
levying and collection of tax and the prevention of fraud, they must not go beyond 
what is necessary to attain those objectives by systematically undermining the 
right to deduct VAT, which is a fundamental principle of the common system of 
VAT established by the relevant EU legislation, in accordance with the judgment 
of 18 December 1997, Molenheide and Others, C-286/94, C-340/95, C-401/95 
and C-47/96, EU:C:1997:623, paragraph 47. 
28 The Audiencia National believes that, contrary to the judgment of the Tribunal 
Supremo, the Court of Justice has already resolved the issue, putting an end to the 
possibility of that right being asserted without any time limit. The judgments of 
21 June 2012, C-294/11, paragraph 29, of 21 March 2018, C-533/16, paragraph 46 
and of 28 July 2016, Astone, C-332/15, EU:C:2016:614, paragraph 33, stated that 
the possibility of exercising the right to deduct VAT without any temporal limit 
would be contrary to the principle of legal certainty, which requires the tax 
position of the taxable person, having regard to his rights and obligations vis-à-vis 
the tax authority, not to be open to challenge indefinitely. Another solution, like 
that arising from the implementation of the judgment of the Tribunal Supremo, 
may result in the debate remaining open indefinitely. 
29 As regards the time of submission of the information necessary for completion of 
the supporting invoices, in its judgment of 8 May 2013, C-271/12, paragraph 35, 
the Court held that invoices cannot be completed after the tax authority has 
adopted its decision refusing to grant the right to deduct VAT because that makes 
it impossible to ensure the correct collection and supervision of VAT. That was 
confirmed by the Court of Justice in the judgment of 26 April 2018, C-81/17, 
paragraph 38. 
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30 As regards any negligent or abusive conduct on the part of the defendant, the 
Audiencia Nacional recalls, in relation to VAT, the judgment of the Court of 
Justice of 26 April 2018, C-81/17, paragraph 49, in accordance with which ‘an 
administrative fine could, inter alia, be imposed on a negligent taxable person …’ 
Similarly, refusal of a right or an advantage on account of abusive or fraudulent 
acts is simply the consequence of the finding that, in the event of fraud or abuse of 
rights, the objective conditions required in order to obtain the advantage sought 
are not in fact met and, accordingly, such a refusal does not require a specific 
legal basis (judgment of the Court of Justice of 14 December 2000, Emsland-
Stárke, C-110/99, EU:C:2000:695, paragraph 56; Halifax, paragraph 93; judgment 
of 4 June 2009, Pometon, C-158/08, EU:C:2009:349, paragraph 28; and judgment 
of 22 November 2017, C-251/16, paragraph 32). 
31 Therefore, the reference of this matter by the Audiencia Nacional is justified by 
the fact that the Audiencia Nacional finds itself in the position of having to 
implement the operative part of a judgment of the Tribunal Supremo which 
appears to conflict with EU legislation and case-law. The Audiencia Nacional 
states that a similar situation arose in Spanish procedural law in relation to the 
way in which the Sala de lo Civil (Civil Chamber) of the Tribunal Supremo 
applied and interpreted in its case-law the limitation of the effects of termination 
linked to a declaration that a contract concluded with a consumer by a seller or 
supplier was unfair under Article 6(1) of Council Directive 93/13/EEC of 5 April 
1993. The case-law of the Tribunal Supremo was amended by the judgment of the 
Court of Justice of 21 December 2016, C-154/15 and C-307/15.