Information;Order — ECLI:EU:C:2025:348
Date: 2025-05-02
Language of the case: Hungarian
Court formation: Sixth Chamber
Subject matter: Taxation;Value added tax;Fundamental rights;Charter of Fundamental Rights
Procedure: Reference for a preliminary ruling;Reference for a preliminary ruling - inadmissible
Origin: Hungary

Summary C-501/24 – 1 
Case C-501/24 
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: 
17 July 2024 
Referring court: 
Fővárosi Törvényszék (Hungary) 
Date of the decision to refer: 
4 June 2024 
Applicant: 
Klinka-Geo Trans Földmunkavégző Ipari, Kereskedelmi és 
Szolgáltató Kft. 
Defendant: 
Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága 
  
Subject matter of the main proceedings 
Challenge to the administrative rulings refusing the deduction of input value 
added tax (VAT) on a series of accepted invoices. 
Subject matter and legal basis of the request 
Conditions for restricting the right to deduct VAT. 
Procedure to be followed by the lower court if, in deciding a particular dispute, 
there is a conflict between the guidelines received from the higher national court 
and the case-law of the Court of Justice. 
Legal basis: Article 267 TFEU. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-501/24 
 
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Questions referred for a preliminary ruling 
1. Do Articles 167, 168(a) and 178(a) of the VAT Directive and the right to an 
effective remedy and to a fair trial enshrined as a general principle of law in 
Article 47 of the Charter of Fundamental Rights of the European Union (‘the 
Charter’), in conjunction with the fundamental principles of fiscal neutrality, 
effectiveness and legal certainty, preclude the practice of a tax authority 
whereby – in accordance with the content of paragraphs 1 and 2 of Opinion 
No 5/2016 of 26 September 2016 issued by the Administrative and Labour 
Chamber of the Kúria (Supreme Court, Hungary), the national court of last 
instance – that authority applies the aforementioned provisions drawing a 
distinction with the effect that, if it declares that the economic transaction 
reflected in the invoice did not take place, it does not examine whether the 
recipient of the invoice was or should have been aware of the tax evasion or 
avoidance, while if, on the other hand, it declares that the economic transaction 
did take place, but not between the parties shown on the invoice, it examines, on 
the basis of the facts, whether the recipient of the invoice was or should have been 
aware of the tax evasion or avoidance? 
2. Do the articles of the VAT Directive, the principles of law referred to above 
and the tax authority’s legal obligation to provide proof by means of objective 
facts, preclude a procedure in which that authority: 
(a) as a condition for exercising the right to deduct the tax, and invoking lack of 
due diligence, imposes an obligation on the taxable person to carry out checks of 
whether the issuer of the invoice has committed an irregularity that is grounds for 
invalidity and has no causal link with the obligation to pay VAT or therefore with 
the exercise of the right of deduction, since, under national and EU law, the 
obligation to pay VAT exists also where a contract is invalid, once a demonstrable 
economic result has occurred; 
(b) denies the taxable person the right to deduct tax, without examining due 
diligence, on the ground that, subsequently to the economic transaction, in 
reliance on circumstances attributable to the issuer of the invoice in the period 
covered by the inspection, it has been established that the economic transaction 
reflected in the invoice did not take place; 
(c) requires that the loss resulting from the unsuccessful witness evidence be 
borne by the taxable person which furnishes proof by means of an invoice, on the 
ground that, in order for the deduction of VAT to be allowed, in addition to the 
invoice, the circumstances in which the invoiced economic transaction took place 
must be the subject matter of a detailed statement by the taxable persons named on 
the invoice and by the representatives of the undertakings that participated in any 
way in the economic transaction, taking into account also the principle established 
by the Court of Justice according to which rules of evidence laid down in national 
law may not undermine the effectiveness of EU law? 
KLINKA-GEO TRANS 
 
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3. In the light of the aforementioned provisions of the VAT Directive, 
Article 47 of the Charter and the primacy of EU law, are the decisions of the 
Court of Justice containing guidelines on the rules of the VAT Directive 
concerning the right of deduction and on the circumstances to be assessed in the 
context of the knowledge of the taxable person applicable in the present case if the 
tax authority, on the basis of the same circumstances that were examined in the 
context of that knowledge, determines that the economic transaction did not take 
place? 
4. Do Article 267 TFEU, the principle of the primacy of EU law and the right 
to an effective remedy and to a fair trial enshrined in Article 47 of the Charter 
preclude the fact that a national court of last instance: 
(a) claiming that there are differences in the factual circumstances, in the 
context of an appeal in which a number of decisions in the field of VAT deduction 
are examined, does not apply the decisions of the Court of Justice in that field or 
prohibits them from being relied on in new proceedings, on the ground that, when 
compared with the circumstances listed in the decision under appeal, the decisions 
of the Court of Justice contain only indications relating to isolated circumstances, 
and relying on the distinction in paragraphs 1 and 2 of Opinion No 5/2016 of the 
Administrative and Social Chamber of the Hungarian Supreme Court, the logic of 
which means that the decisions of the Court of Justice in VAT cases are not 
applicable in situations where the tax authority finds that the economic transaction 
invoiced did not take place, even though it is precisely the legality of that finding 
that the applicant is challenging in its action; 
(b) after finding that the decisions of the Court of Justice have been misapplied 
in the case in question, orders the court, in respect of the new proceedings, 
contrary to what was established in those decisions, to conduct the new 
proceedings in accordance with the case-law summarised in the – non-binding – 
opinion of the Administrative and Labour Chamber of the Hungarian Supreme 
Court and with the case-law subsequent to the adoption of that opinion; 
(c) in connection with appeal proceedings, deviates from the judgment of the 
Court of Justice in the case in question as a result of preliminary ruling 
proceedings and takes a decision contrary to that judgment without bringing 
preliminary ruling proceedings itself, despite the contradictions with regard to the 
interpretation of EU law demonstrated in its decision? 
5. Given the necessary respect for the rights and principles mentioned in the 
previous question and the obligation to disregard national law that is contrary to 
EU law, can a court of a Member State, ordered by the court of last instance to 
initiate new proceedings, deviate in the second proceedings from the instructions 
given by the court of last instance – without referring a question for a preliminary 
ruling – if it deems those instructions to be contrary to EU law, and if, after the 
order to initiate new proceedings, the Court of Justice delivers a decision on the 
same point of law in a case with similar facts that is contrary to the legal 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-501/24 
 
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interpretation on which the obligation to initiate new proceedings is based? Or is it 
only possible to avoid the obligation imposed by the national court of last instance 
and to implement the subsequent decision of the Court of Justice if the court 
responsible for initiating new proceedings makes a request for a preliminary 
ruling in the new proceedings? 
6. In the light of the principle of the primacy of EU law and the consequent 
obligation to disapply national law that is contrary to EU law, is the answer to the 
fourth and fifth questions applicable in all cases, irrespective of the subject matter 
of the dispute, or only in cases concerning the right to deduct VAT? 
Provisions of European Union law and case-law relied on 
Article 47 in the Charter of the Fundamental Rights of the European Union. 
Articles 9, 167, 168(a), 178(a), 220 and 226 of Council Directive 2006/112/EC of 
28 November 2006 on the common system of value added tax (OJ 2006 L 347, 
p. 1; ‘the VAT Directive’). 
Judgments in Kittel and Recolta Recycling (C-439/04 and C-440/04, 
EU:C:2006:446), Kücükdeveci (C-555/07, EU:C:2010:21) and Mahagében and 
Dávid (C-80/11 and C-142/11, EU:C:2012:373); order in Hardimpex (C-444/12, 
not published, EU:C:2013:318); judgment in Maks Pen (C-18/13, EU:C:2014:69); 
orders in Signum Alfa Sped (C-446/15, not published, EU:C:2016:869), Viking 
Fővállalkozó (C-610/19, EU:C:2020:673), Crewprint (C-611/19, not published, 
EU:C:2020:674) and A. T.S. 2003 (C-289/22, EU:C:2023:26), and judgment in 
Global Ink Trade (C-537/22, EU:C:2024:6). 
Provisions of national law relied on 
Article 1(2), (3) and (7), Article 2(1) and Article 97(4) and (6) of the az adózás 
rendjéről szóló 2003. évi XCII. törvény (Law No XCII of 2003 establishing a 
Code of Tax Procedure). 
Article 6(2) of the a közigazgatási hatósági eljárás és szolgáltatás általános 
szabályairól szóló 2004. évi CXL. törvény (Law No CXL of 2004 laying down 
general provisions on administrative services and procedure). 
Article 14 of the a személy és vagyonvédelmi, valamint a magánnyomozói 
tevékenység szabályairól szóló 2005. évi CXXXIII. törvény (Law No CXXXIII of 
2005 regulating the activities of private security companies and private 
detectives). 
Article 119(1), Article 120(a) and Article 127(1)(a) of the az általános forgalmi 
adóról szóló 2007. évi CXXVII. törvény (Law No CXXVII of 2007 on value 
added tax). 
KLINKA-GEO TRANS 
 
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Succinct presentation of the facts and procedure in the main proceedings 
1 The tax authority at first instance carried out an ex-post inspection of the VAT 
returns of Klinka-Geo Trans Földmunkavégző Ipari, Kereskedelmi és Szolgáltató 
Kft. (‘the applicant’) for December 2011. Following the inspection, it concluded 
that the applicant had wrongly claimed a refund of the input VAT on the three 
invoices detailed below and therefore denied the refund and imposed a late 
payment surcharge and a tax penalty on the applicant. 
2 In the case of the invoice issued by Intellisec Kft. for private security services 
(‘the Intellisec invoice’), a parallel inspection of that company revealed 
irregularities with regard to professional rules concerning subcontracting and the 
recording of services rendered that made it impossible to verify where, when and 
by whom the services indicated on the invoice had been provided. 
3 As regards the invoice issued by Magyar Beton Gyártó Kft. for the transport and 
laying of reinforced concrete foundation slabs (‘the Magyar Beton invoice’), the 
representative of that company did not appear and did not submit any 
documentation, despite having been requested to do so by the tax authorities. 
However, the new owner of that company – who has been the owner since a date 
after the date of issue of the Magyar Beton invoice – stated that this invoice had 
been issued to conceal another transaction, which is why it had not been included 
in the company’s tax return and that a complaint had been filed in relation to this 
fact. 
4 With regard to the invoice issued by Double Two Kft. for personnel transport 
services (‘the Double Two invoice’), no information or documents could be 
obtained during the inspection from the company’s representative, who was, 
moreover, the same person acting as manager of the applicant. Double Two Kft. 
failed to comply with its obligations to file tax returns and pay taxes, and its tax 
identification number was eventually cancelled. 
5 In its decision, which was upheld by the defendant at the administrative appeal 
stage, the tax authority at first instance justified its findings by arguing that, in the 
case of the Intellisec invoice, it was not possible to verify which parties the 
services had been provided between and that, in the case of the Magyar Beton and 
Double Two invoices, it was not proven that the services had been provided at all. 
Therefore, the applicant knew or should have known that it was a party to tax 
evasion and that it was not entitled to a refund of input VAT in respect of those 
invoices. 
6 The applicant appealed the defendant’s decision before the referring national 
court, which upheld its claim on the basis of the case-law of the Court of Justice. 
In that context, it found, first, that the defendant had failed to state clearly what 
the tax evasion of which the applicant should have been aware had consisted of. 
Moreover, it held that the defendant expected the applicant to verify 
circumstances of which it was unaware, because they were business secrets 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-501/24 
 
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(pricing, identity of subcontractors, origin of goods), or because it was not 
required to check them (compliance with professional standards for private 
security services), or because they had come to light during the tax inspection 
(inability to contact managers, lack of documentation, etc.). Furthermore, these 
circumstances were unrelated to the provision of the services in question. 
7 With regard to the Magyar Beton invoice, the referring court found that the 
statement from the new owner of the company to which the defendant had 
referred was vitiated by contradictions, both internally and in relation to other 
established facts. This owner, having failed to fulfil the relevant tax obligations in 
relation to this invoice, also has an interest in having the service declared not to 
have been rendered. 
8 On appeal, the Hungarian Supreme Court set aside the judgment of the referring 
court and ordered that court to conduct new proceedings and to issue a new 
decision. According to the grounds of the Supreme Court’s decision, the referring 
court had erred in relying on the case-law of the Court of Justice, which referred 
to different factual situations, and had failed to take into account the case-law of 
the Hungarian Supreme Court concerning the right to deduct VAT laid down 
Opinion No 5/2016 of 26 September 2016 issued by the Supreme Court’s 
Administrative and Labour Chamber (‘the Supreme Court’s opinion’). 
9 The referring court summarises the Supreme Court’s opinion as follows: 
– If the economic transaction reflected in the invoice has not taken place, there is 
no need to examine whether the recipient of the invoice knew or should have 
known about the tax evasion or avoidance. 
– If the economic transaction did take place, but not between the parties shown 
on the invoice, the authorities may examine, depending on the facts, whether 
the recipient of the invoice knew or should have known about the tax evasion 
or avoidance. 
– If the economic transaction took place between the parties shown on the 
invoice, but the issuer of the invoice (or the issuer of an invoice accepted by 
that party) engaged in fraudulent conduct, the authorities must examine, in the 
administrative tax procedure, whether the recipient of the invoice knew or 
should have known about the tax evasion or avoidance. 
10 As regards the new proceedings, the Hungarian Supreme Court has instructed the 
referring court to rule – on the basis of the facts it has found to be established – on 
whether the economic transaction has taken place and whether it has taken place 
between the parties shown on the invoice, and, in accordance with the Supreme 
Court’s opinion: 
– if it can be proven that the economic transaction took place but the identity of 
the parties cannot be proven (Intellisec invoice), to examine whether the 
applicant knew or ought to have known of it; 
KLINKA-GEO TRANS 
 
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– if it cannot be proven that the economic transaction took place (Magyar Beton 
and Double Two invoices), to declare, without further examination, that the 
applicant was necessarily aware of it and that it is therefore not entitled to 
deduct VAT. 
Essential arguments of the parties in the main proceedings 
11 The applicant asserts that the facts have not been properly established. It 
maintains that it is contrary to both national law and EU case-law to hold that it is 
the responsibility of the taxable person to prove all the circumstances relating to 
the provision of services. 
12 On the other hand, the defendant has not provided any evidence to show that the 
economic transactions reflected in the invoices in question did not take place 
between the parties listed in those invoices or that they did not take place at all. It 
argues that the services in question were provided in full and that it paid for them. 
13 In relation to the Intellisec invoice, the applicant claims that it checked the 
information on Intellisec on the Partner Control website, that Intellisec had been 
recommended to it by some of its former customers and that, during the provision 
of the service, which lasted for an uninterrupted period of time, no circumstances 
arose that would have required more stringent checks. In any event, the applicant 
submits that it does not have an obligation to verify that a service provider fully 
complies with the professional rules governing its activities. 
14 In terms of the Magyar Beton invoice, the applicant argues that it cannot be held 
liable for the fact that the company issuing the invoice did not fulfil its declaration 
and reporting obligations. It claims that it was under no obligation to know the 
origin of the goods installed or the identity of the employees and that, although the 
building resulting from the service rendered could be inspected at its site, the tax 
authorities did not carry out any on-the-spot checks. 
15 Finally, in relation to the Double Two invoice, the applicant submits that the 
breaches by the company issuing the invoice challenged by the tax authorities – 
concerning the obligation to submit a tax return and to provide documentation – 
occurred at a time when there was no personal tie between it and that company. 
As regards the fact that its former manager (now deceased) had failed to provide 
information, the applicant claims that it had indicated to the tax inspector on 
several occasions that the state of health of that individual prevented that 
information being provided. 
16 The defendant emphasises that a taxable person can reasonably be expected to 
check whether the issuer of an accepted invoice is capable of performing the 
service reflected in the invoice and on whose behalf the persons providing the 
service are acting. However, the applicant has not been able to prove that the 
economic transactions invoiced took place between the parties indicated on the 
invoices, and it cannot therefore exercise its right to deduct VAT. 
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Succinct presentation of the reasoning in the request for a preliminary ruling 
17 In delivering the judgment set aside by the Supreme Court, the referring court 
considered that the law and case-law of the European Union were sufficiently 
clear and that it was not necessary to refer the case for a preliminary ruling. 
However, the Supreme Court has interpreted the case-law of the Court of Justice 
as meaning that that Court’s rulings only relate to isolated circumstances and that 
they are not applicable when the tax authorities invoke additional circumstances. 
18 The guidelines contained in the Supreme Court’s decision are binding on the 
referring court, which may depart from them only if the Court of Justice expressly 
rules in the present case in a binding general decision. 
First question referred 
19 On the basis of its own opinion, the Supreme Court divided the transactions at 
issue in the main proceedings into two categories. 
20 The Intellisec invoice falls into the first category, where it is not disputed that the 
economic transaction evinced by the invoice took place, although it cannot be 
determined whether it took place between the parties indicated on the invoice. In 
this case, the applicant’s knowledge can be examined. The second category 
includes the invoices from Magyar Beton and Double Two, in respect of which 
the economic transaction cannot be demonstrated to have taken place, and 
therefore, according to the Supreme Court’s opinion, the applicant’s knowledge 
does not have to be examined. 
21 The referring court wishes to know whether the above conclusions are in 
accordance with the provisions of the VAT Directive and with the fundamental 
principles of the VAT system, since, in its view, they are not fully in line with the 
binding case-law of the Court of Justice on these matters. 
Second question referred 
22 This question concerns the transaction underlying the Intellisec invoice. First, the 
referring court is questioning whether an infringement of the special rules 
governing the provision of the service committed by the issuer of the invoices – 
such as the failure to draw up the contract for the provision of private security 
services in writing, the use of subcontractors without the consent of the client or 
the failure to keep records of the activity – can be held against the applicant. 
23 In reality, non-compliance with these rules does not constitute an obstacle to the 
provision of the service and, as a general rule, it is contrary to the principle of 
fiscal neutrality to distinguish between lawful and unlawful transactions. 
Moreover, according to the referring court, the applicant could not reasonably 
have been expected to establish the abovementioned circumstances in the present 
case. 
KLINKA-GEO TRANS 
 
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24 Furthermore, the referring court is asking whether, in the event that proof of the 
economic transaction on the invoice cannot be provided, that fact can be held 
against the taxable person seeking to exercise its right of deduction. 
Third question referred 
25 By this question, the referring court is seeking to ascertain whether, if the tax 
authorities were to conclude that the invoiced transaction did not take place, that 
constitutes a specific factual element that precludes consideration of the case-law 
of the Court of Justice in the judicial review of the circumstances relied on by the 
tax authorities. 
Fourth to sixth questions referred 
26 The referring court bases these questions on the fact that, despite the orders 
delivered by the Court of Justice in the Crewprint and Vikingo cases, the national 
case-law has not changed. The application of the case-law of the Court of Justice 
is systematically dismissed on the ground that the facts are different. In that 
regard, the referring court is asking, in particular, whether the Supreme Court, as 
the court of last instance, is required to refer a question for a preliminary ruling if, 
by its legal interpretation, it intends to depart from the case-law of the European 
Union. 
27 The fifth question referred by the referring court is based on the fact that the 
decision of the Supreme Court in the main proceedings, which requires it to 
conduct new proceedings, predates the judgment of the Court of Justice in the 
Global Ink Trade case. The referring court believes that it can take that judgment 
into consideration only if it departs from the guidelines given to it by the Supreme 
Court and that, however, it can do so only on the basis of a preliminary ruling of 
the Court of Justice given in this matter. 
28 Finally, the referring court points out that it is necessary to refer questions for a 
preliminary ruling similar to those raised in Case C-262/24, Pegazus Busz, 
because, in the view of the Supreme Court, the decisions of the Court of Justice 
are applicable only where the facts are entirely the same. Moreover, even if the 
applicant were to withdraw one of the two proceedings – which would also entail 
the withdrawal of the request for a preliminary ruling – there would still be a case 
pending in which the questions raised could be answered.