Judgment;Abstract — ECLI:EU:C:2023:573
Date: 2023-07-13
Language of the case: Hungarian
Court formation: Fifth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Hungary

Translation C-615/21 – 1 
Case C-615/21 
Request for a preliminary ruling 
Date lodged:  
4 October 2021 
Referring court:  
Szegedi Törvényszék (Hungary) 
Date of the decision to refer:  
4 October 2021 
Applicant:  
Napfény-Toll Kft. 
Defendant:  
Nemzeti Adó – és Vámhivatal Fellebbviteli Igazgatósága 
  
SZEGEDI TÖRVÉNYSZÉK (SZEGED HIGH COURT, HUNGARY)  
[…] 
The Szeged High Court, asked to rule in administrative proceedings on an action 
against an administrative decision taken in a tax matter between Napfény-Toll 
Kft. […] ([…] Árpádhalom […]), applicant, and Nemzeti Adó – és Vámhivatal 
Fellebbviteli Igazgatósága (Appeals Directorate of the National Tax and 
Customs Administration, Hungary) […] ([…] Budapest […]), defendant, has 
made the following  
Order 
This court […] submits to the Court of Justice of the European Union (‘the 
Court’) a request for a preliminary ruling on the following question: 
Are the principles of legal certainty and of effectiveness, which form part of 
Community law, to be interpreted as not precluding legislation of a Member State 
which does not allow the courts to exercise any discretion, such as 
Paragraph 164(5) of the az adózás rendjéről szóló 2003. évi XCII. törvény (Law 
XCII of 2003 establishing a code of tax procedure; ‘the former Code of Tax 
EN 
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Procedure’), and the practice based on that legislation, under which, in matters of 
value added tax (‘VAT’), the limitation period in respect of the right of the tax 
authorities to make a tax assessment is to be suspended for the whole duration of 
judicial review, regardless of the number of repeat administrative tax procedures, 
with no ceiling on the cumulative duration of the suspensions where there are 
several rounds of judicial review, one after another, including in cases where the 
court ruling on a decision of a tax authority taken as part of a repeat procedure 
following on from an earlier court decision finds that the tax authority failed to 
comply with the guidance contained in that court decision, that is to say, where it 
is due to the fault of that authority that the new court proceedings took place[?]  
[…] [procedural element of national law] 
Grounds 
Facts: 
[1] The applicant deducted from the tax for which it was liable the amount of 
VAT included in the consideration for products which it acquired in June 2010 
and in the course of the period from November 2010 to September 2011 (‘the 
period under consideration’). 
[2] The Nemzeti Adó – és Vámhivatal Dél-budapesti Igazgatósága (Tax and 
Customs Directorate for Budapest South, Hungary), as the first-level tax authority, 
by a mission letter […] dated 9 December 2011 and communicated to the 
applicant on 13 December 2011, began a review of the period under consideration. 
That review revealed that some of the products purchased by the applicant, in 
reality, did not come from undertakings which had issued invoices to the 
applicant’s address. 
First-level decision 
[3] The first-level tax authority, by a decision […] dated 8 October 2015, found 
that the applicant had tax arrears of a total of 144 785 000 Hungarian forint 
(HUF), imposed a tax fine on it of HUF 108 588 000 and applied a late-payment 
penalty of HUF 46 080 000, then ordered the applicant to pay all of those sums. 
[4] According to the grounds of the decision, some of the invoices concerned 
did not correspond to any real economic transaction and the rest of them could 
admittedly be linked to an economic transaction but were vitiated by tax fraud of 
which the applicant was aware.  
First second-level decision 
[5] Having received a complaint from the applicant, the Nemzeti Adó – és 
Vámhivatal Közép-magyarországi Regionális Adó Főigazgatósága (Regional Tax 
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Directorate-General for Central Hungary, forming part of the National Tax and 
Customs Administration), the predecessor of the defendant, by decision […] of 
11 November 2015, amended the first-level decision with regard to the late-
payment penalty and upheld it as to the remainder. That decision was notified on 
14 December 2015. 
First judgment 
[6] Ruling on an action by the applicant, the Fővárosi Közigazgatási és 
Munkaügyi Bíróság (Budapest Administrative and Labour Court, Hungary), by a 
judgment […] of 2 March 2018, which became final on the same day, annulled the 
second-level decision and imposed an obligation to conduct a new procedure, on 
the ground that that decision was contradictory: it contained facts which were 
different to those found in the first-level decision but stated, at the same time, that 
the first-level tax authority had correctly established the facts. The task given to 
the defendant as part of the new procedure, as defined in that judgment, was to set 
out in the operative part of the decision an amendment to the grounds of the first-
level decision, then to indicate in the grounds to what extent the finding of the 
facts made by the first-level tax authority was not upheld and what were the facts 
adopted instead.  
Second second-level decision 
[7] The defendant, by decision […] of 5 March 2018, upheld – whilst lowering 
the amount of the late-payment penalty – the first-level decision, amending its 
grounds. The defendant conducted the repeat procedure in accordance with the 
provisions of the a közigazgatási hatósági eljárás és szolgáltatás általános 
szabályairól 2004. évi CXL. törvény (Law No CXL of 2004 laying down general 
provisions on administrative services and procedure; ‘the Law on administrative 
procedure’) and the former Code of Tax Procedure.  
[8] The defendant notified that decision to the applicant on 7 March 2018.  
Second judgment 
[9] Ruling on an action by the applicant, the Budapest Administrative and 
Labour Court, by a judgment […] of 5 July 2018, which became final on the same 
day, declared the defendant’s decision null and void and obliged it to conduct a 
new procedure. In the grounds of that judgment, the defendant was criticised for 
having satisfied only as a matter of form, in the repeat procedure, the obligations 
which had been imposed on it by the court: the defendant’s decision, taken on the 
first business day following the delivery of the judgment, repeated largely word 
for word the first second-level decision, without showing to what extent it 
amended the finding made by the first-level authority, and, in addition, it still 
contained contradictory findings, which were mutually exclusive, with regard to 
whether the transactions concerned were real. All of that meant that that decision 
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was null and void pursuant to Paragraph 109(4) and Paragraph 121(1)(f) of the 
Law on administrative procedure. 
Judgment given on appeal 
[10] Ruling on an appeal by the defendant, the Kúria (Supreme Court, Hungary), 
by a judgment […] of 30 January 2020, upheld the judgment on the substance. 
[11] According to the grounds relied upon by the Supreme Court, the defendant’s 
decision annulled by the court was contradictory, and its statement of reasons 
remained the same on conclusion of the repeat procedure, so that the court at first 
instance was right to find that the defendant had failed to comply with the binding 
guidance established in the previous judgment and that the decision contested by 
the action was null and void.  
[12] The Supreme Court stated that the circumstance invoked by the defendant in 
its appeal, namely that it had only 17 days at its disposal before its right to make a 
tax assessment would be time-barred, could not exempt it from the performance of 
its legal obligations.  
[13] At the same time, it found that, after 1 January 2018, the tax authority was 
obliged to conduct the repeat procedure subsequent to the judgment on the basis 
of the new rules of procedure, given the date of the first judgment, namely 
2 March 2018. 
Third second-level decision (the decision of the defendant) 
[14] The defendant, by its decision […] of 6 April 2020 – which is contested in 
the present proceedings – (‘the decision of the defendant’), upheld the first-level 
decision, whilst amending the provisions relating to the late-payment penalty. 
[15] The defendant, referring to the obligation relating to the new procedure 
contained in the first judgment, indicated that it had not made a finding of facts 
which were different to those established in the first-level decision and that the 
first-level tax authority had satisfied its obligation to clarify the facts and had 
researched and established the facts as required. 
The claim 
[16] In its action, which it clarified and supplemented on a number of occasions 
in the course of the proceedings to take account of the defence, the applicant seeks 
annulment of the decision of the defendant, with that annulment also covering the 
first-level decision; it argues, inter alia, that the right of the tax authority to make a 
tax assessment was extinguished, pursuant to Paragraph 164(1) and (5) of the 
former Code of Tax Procedure, prior to the date of that decision, which represents 
an obstacle to the re-examination of the substance of the decision of the defendant. 
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[17] The applicant argues that, under Paragraph 164(1) of the former Code of 
Tax Procedure, the right to make a tax assessment is to be time-barred after five 
years from the last day of the calendar year in which the declaration or notification 
relating to that tax should have been made or, where there is no declaration or 
notification, in which the tax should have been paid. 
[18] Paragraph 164(13) of the former Code of Tax Procedure, which was in force 
from 1 January 2012, admittedly states that, in the cases for which it provides, the 
limitation period in respect of the right to make a tax assessment is to be extended 
by six months, but, according to the transitional provision of Paragraph 189(2) of 
the former Code of Tax Procedure, that provision applies only to procedures 
commenced on or after 1 January 2012.  
[19] Given that the tax review began with the delivery of the mission letter to the 
applicant on 13 December 2011, Paragraph 164(13) of the former Code of Tax 
Procedure is not applicable in the present case. 
[20] Paragraph 164(5) of the former Code of Tax Procedure, under which, in the 
event of judicial review of a decision of a tax authority, the limitation period is to 
cease to run from the moment when the decision of the second-level tax authority 
became final until that when the court decision becomes final or, in the event of an 
appeal, until a ruling has been given on that appeal, cannot be broadly interpreted 
to take account of the duration of the judicial review of decisions taken as part of 
repeat procedures. A broad interpretation would be seriously detrimental to the 
legal certainty which limitation is intended to protect, inasmuch as the repeated 
challenging before the courts of [administrative] decisions successively complying 
in a purely formal manner with the judgments from which they followed on would 
extend the limitation period by a number of years on account of those possible 
multiple suspensions.  
[21] The limitation period provided for in Paragraph 164(1) of the former Code 
of Tax Procedure corresponds, for the financial years covered by the review, to 
1 827 days in the case of the year 2010 and 1 828 days in the case of the year 
2011. 
[22] Thus, in the present case, the limitation period was suspended only between 
the time when the first second-level decision became final (14 December 2015) 
and the time when the first judgment became final (2 March 2018), that is for 
810 days. When the 1 809 days or, as applicable, 1 444 days which elapsed 
between the date when the limitation period started to run (31 December 2010 or, 
as applicable, 31 December 2011) and the date on which that period was 
suspended (14 December 2015) are added to the 775 days which elapsed between 
the end of the suspension of the limitation period (2 March 2018) and the date on 
which the decision of the defendant was notified to the applicant (15 April 2020), 
it can be seen that the right to make a tax assessment is extinguished for all the 
periods covered by the review. 
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[23] According to the applicant, the right to make a tax assessment was 
extinguished in February 2020 at the latest for all the periods covered by the 
review, even if it is necessary to interpret Paragraph 164(5) of the former Code of 
Tax Procedure to the effect that it also applies to judicial review initiated as a 
result of repeat procedures. 
[24] In the appeal which it brought against the second judgment, the defendant 
indicated that, given that the [first] judgment had become final on 2 March 2018, 
it had only 17 days at its disposal, and that was confirmed by the judgment given 
on the appeal. 
[25] After the delivery of the judgment given on the appeal (30 January 2020), 
the limitation period left to run was therefore 17 days, before subtraction of the 
number of days between the delivery of the first judgment (2 March 2018) and the 
date on which the second-level decision had become final (7 March 2018), during 
which the limitation period had started to run again. Thus, the number of days 
which elapsed between the delivery of the judgment given on the appeal and the 
adoption of the decision of the defendant (6 April 2020) exceeds the duration of 
the limitation period which was left to run. 
[26] Should this court not accept that interpretation of the abovementioned legal 
provisions, the applicant requested that a reference be made to the Court in order 
for it to assess whether the practice of a Member State which allows the repeated 
suspension of the limitation period on account of judicial review is compatible 
with the EU law principles of legal certainty and the protection of legitimate 
expectations. 
The defence 
[27] The defendant relied, with regard to the suspension of the limitation period, 
[on a] judgment […] of the Supreme Court in which, making reference to its 
earlier decisions, it stated, inter alia, that the rules of the former Code of Tax 
Procedure relating to limitation cannot be ignored, including in cases where 
judicial review results in a finding of nullity. Paragraph 164(5) of the former Code 
of Tax Procedure governs the suspension of the limitation period for cases in 
which a decision of a tax authority is the subject of judicial review. In the context 
of the application of the former Code of Tax Procedure, it is the very fact of 
‘judicial review’, and not the content of the decision which concludes that review, 
which is a condition of the applicability of the suspension and lengthening of the 
limitation period. Invoking the content of the same decision of the Supreme Court, 
the defendant opposed the submission of a request for a preliminary ruling. 
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Legal context: 
EU law 
[28] Article 4(3) of the Treaty on European Union (‘the TEU’) provides that, 
pursuant to the principle of sincere cooperation, the Union and the Member States 
shall, in full mutual respect, assist each other in carrying out tasks which flow 
from the Treaties. 
The Member States shall take any appropriate measure, general or particular, to 
ensure fulfilment of the obligations arising out of the Treaties or resulting from 
the acts of the institutions of the Union. 
(…) 
[29] Under Article 113 of the Treaty on the Functioning of the European Union 
(‘the TFEU’), the Council shall, acting unanimously in accordance with a special 
legislative procedure and after consulting the European Parliament and the 
Economic and Social Committee, adopt provisions for the harmonisation of 
legislation concerning turnover taxes, excise duties and other forms of indirect 
taxation to the extent that such harmonisation is necessary to ensure the 
establishment and the functioning of the internal market and to avoid distortion of 
competition. 
[30] According to the terms of the third paragraph of Article 288 TFEU, a 
directive shall be binding, as to the result to be achieved, upon each Member State 
to which it is addressed, but shall leave to the national authorities the choice of 
form and methods. 
[31] Under Article 267 TFEU, the Court of Justice of the European Union shall 
have jurisdiction to give preliminary rulings concerning: 
(a) the interpretation of the Treaties; 
(b) the validity and interpretation of acts of the institutions, bodies, offices or 
agencies of the Union. Where such a question is raised before any court or 
tribunal of a Member State, that court or tribunal may, if it considers that a 
decision on the question is necessary to enable it to give judgment, request the 
Court to give a ruling thereon. 
Hungarian law 
[32] In Hungary, the rules of administrative procedure were the subject of a new 
codification, which entered into force on 1 January 2018, as part of which the 
legislature repealed the Law on administrative procedure and the former Code of 
Tax Procedure. With effect from that date, the rules of general administrative 
procedure are no longer valid for tax procedure, which is now governed by the 
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provisions of the az adóigazgatási rendtartásról szóló 2017. évi CLI. törvény (Law 
CLI of 2017 setting out a code of tax administration; ‘the Code of Tax 
Administration’) and the az adózás rendjéről szóló 2017. évi CL. törvény (Law 
CL of 2017 establishing a code of tax procedure; ‘the new Code of Tax 
Procedure’). 
[33] Under Paragraph 164(1) of the former Code of Tax Procedure, as it was in 
force on the date of the delivery of the mission letter, the right to make a tax 
assessment is to be time-barred after five years from the last day of the calendar 
year in which the declaration or notification relating to that tax should have been 
made or, where there is no declaration or notification, in which the tax should 
have been paid. (…) 
[34] Paragraph 164(5) of the former Code of Tax Procedure provides that, in the 
event of judicial review of a decision of a tax authority, the limitation period in 
respect of the right to make a tax assessment is to cease to run from the moment 
when the decision of the second-level tax authority became final until that when 
the court decision becomes final or, in the event of an appeal, until a ruling has 
been given on that appeal. 
[35] Under Paragraph 203(3) of the new Code of Tax Procedure, which has been 
in force since the code entered into force, if a taxpayer has initiated an 
administrative court action against a decision of a tax authority, the limitation 
period in respect of the right to make a tax assessment is to cease to run from the 
moment when the decision of the second-level tax authority became binding until 
that when the court decision becomes final or, in the event of an appeal, until a 
ruling has been given on that appeal. (Since 1 January 2019, under that rule, the 
suspension starts on the date when the right to bring an action arises.) 
[36] [Paragraph 203](7) of the new Code of Tax Procedure states that the 
limitation period in respect of the right to make a tax assessment is to be extended 
once by 12 months if 
(…) 
(c) in the context of an administrative court action against a decision of a tax 
authority, a court orders that a new procedure be conducted. 
[37] According to Paragraph 271(1) of the new Code of Tax Procedure [whose 
wording is identical to that of Paragraph 139(1) of the Code of Tax 
Administration], the provisions of that law must be applied to procedures which 
are begun and procedures which are repeated after the entry into force of that law. 
[38] According to Paragraph 109(4) of the Law on administrative procedure, an 
administrative authority is to be bound by the operative part and the grounds of 
the decision given by the court ruling on an administrative dispute and is to 
comply with them in the course of the new procedure and in adopting a new 
decision. 
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[39] Paragraph 121(1)(f) of the Law on administrative procedure provides that 
(…) a decision must be annulled if its content is contrary to the provisions of 
Paragraph 109(3) and (4). 
National case-law: 
[40] The Supreme Court, in the grounds of its judgment […] [cited in 
paragraph 27 above] stated the following: 
[41] [17] The Supreme Court, making reference [to a number of] earlier decisions 
[…], has found that the rules of the former Code of Tax Procedure relating to 
limitation cannot be ignored, including in cases where judicial review results in a 
finding of nullity. 
[42] [18] The former Code of Tax Procedure contains rules which are specific to 
the tax field, with regard to the calculation and legal effects of the limitation of the 
right to make a tax assessment in the scenario of an administrative court action 
and the repeat administrative procedure which follows. The effect of the initiation 
of a court action against a final administrative decision is to suspend the limitation 
period until the adoption of the final court decision, or – if an appeal is brought – 
until the adoption of the decision given on the appeal [Paragraph 164(5) of the 
former Code of Tax Procedure], but, in addition, that period is also extended if the 
court orders that a new procedure be conducted [Paragraph 16[4](13)(c) of the 
former Code of Tax Procedure]. Consequently, the limitation period which has 
elapsed up until the administrative decision becomes final starts to run again from 
the publication of the final court decision, and the duration of the action is not 
included in the calculation of the limitation period. The limitation period elapsed 
up until the adoption of the final administrative decision starts to run again from 
the adoption of the decision given on the court action, and it is necessary in 
addition  
– under the version of Paragraph 16[4](13)(c) of the Code of Tax Procedure 
which was in force when the review at issue began, 
– to add six months to that period. 
[43] [19] Paragraph 164(5) of the former Code of Tax Procedure provides for 
limitation to be suspended in cases where a decision of a tax authority is the 
subject of judicial review. In the context of the former Code of Tax Procedure, it 
is the very fact of ‘judicial review’, and not the content of the decision which 
concludes that review, which is a condition of the applicability of the suspension 
and extension of the limitation period. Judicial review begins with the bringing of 
an action, and that review is not necessarily identical to an examination of the 
substance of a decision of a tax authority; judicial review also allows a court to 
make a finding of a nullity which it has detected of its own motion. The rules of 
the former Code of Tax Procedure – including Paragraph 143(1) thereof – do not 
allow a distinction to be made according to content between the decisions which 
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close judicial review. No ex tunc legal effect may be attached to a null and void 
decision, once a finding of such nullity has been made; however, the tax authority, 
on account of the judicial review, may take a decision suitable to produce legal 
effects within the period referred to in the former Code of Tax Procedure.  
This court’s point of view with regard to the admissibility of the request for a 
preliminary ruling: 
[44] This court would begin by pointing out that Paragraph 164(5) of the former 
Code of Tax Procedure and, for procedures begun and repeated after 1 January 
2018, Paragraph 203(3) of the new Code of Tax Procedure, whose content is in 
essence identical, provide for the suspension [of the limitation period] of the right 
of a tax authority to make a tax assessment in view both of the duration of the 
judicial review of second-level administrative decisions, whether they were 
adopted as part of an initial procedure or as part of repeat procedures, and of the 
duration of the examination by the Supreme Court of appeals brought against 
court decisions, without making provision for an upper limit with regard to the 
number of repeat procedures or the total duration of the suspension. This court is 
bound, also, by the interpretation which was established in the judgment […] of 
the Supreme Court [cited in paragraph 27 above] regarding the question of the 
suspension and extension of the limitation period in the event of judicial review of 
administrative decisions which are null and void.  
[45] Thus, in the case at issue, under Hungarian legislation and the case-law of 
the Supreme Court which is required to be taken into account, the limitation 
period was suspended during the judicial review in the context of the initial 
procedure and in the context of the repeat procedures, as well as during the appeal 
proceedings before the Supreme Court and, finally, for the duration of the present 
dispute. Given that, under Paragraph 271(1) of the new Code of Tax Procedure, it 
is Paragraph 203(7) of that code which applies to the [first] repeat procedure, 
which means that the limitation period of 12 days left to run under the former 
Code of Tax Procedure after the [third] decision of the defendant is to be extended 
by 12 months, the tax authority, following the judgment which settles the present 
dispute, will have a year and 12 days at its disposal, which, in the light of the 
Hungarian legislation and case-law which have been described, may result in a 
further extension of the procedure, which could even be as long as several years.  
[46] This court, by way of a preliminary remark, would also point out that, if a 
different interpretation is adopted to that set out above, that is to say if EU law 
represents an obstacle to the application, in the event of judicial review of 
decisions which are null and void, of the rule which provides for the suspension of 
the limitation period, the right of the tax authority to make a tax assessment in the 
present case was extinguished in the 17 days following the adoption of the first 
judgment, because it was indisputably time-barred in March 2018, given also that 
Paragraph 164(13) of the former Code of Tax Procedure, which, since 1 January 
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2015, has required that the limitation period be extended by [12] months in the 
event of judicial review, was not to be applied in the case of the repeat procedures. 
[47] The Council, on the basis of Article 288 TFEU, adopted Council Directive 
2006/112/EC of 28 November 2006 on the common system of value added tax 
(‘the VAT Directive’). 
[48] The VAT Directive does not contain any explicit provisions concerning the 
limitation of the right pertaining to the assessment of tax by a tax authority. 
[49] According to the terms of Article 4(3) TEU (formerly the Treaty 
establishing the European Economic Community)(‘Article 5 of the Treaty’) 
Member States are obliged to take any appropriate measure, general or particular, 
to ensure fulfilment of the obligations arising out of the Treaties or resulting from 
the acts of the institutions of the Union. 
[50] As the Court has consistently held since its judgment of 10 April 1984, Von 
Colson and Kamann, the Member States’ obligation arising from a directive to 
achieve the result envisaged by the directive and their duty under Article 5 of the 
Treaty to take all appropriate measures, whether general or particular, to ensure 
the fulfilment of that obligation, is binding on all the authorities of Member 
States, including, for matters within their jurisdiction, the courts. The judgments 
of the Court of 13 November 1990, Marleasing (C-106/89, [1990] ECR I-4135, 
paragraph 8), and of 16 December 1993, Wagner Miret (C-334/92, [1993] ECR I-
6911, paragraph 20), make it clear that, when applying national law, whether 
adopted before or after the directive, the national court that has to interpret that 
law must do so, as far as possible, in the light of the wording and the purpose of 
the directive so as to achieve the result it has in view and thereby comply with the 
third paragraph of Article 189 of the Treaty (judgment of 14 July 1994, Faccini 
Dori, C-91/92, EU:C:1994:292, paragraph 26). 
[51] Under paragraph 114 of the judgment of 5 October 2004, Pfeiffer and 
Others (C-397/01 to C-403/01, EU:C:2004:584), the requirement for national law 
to be interpreted in conformity with Community law is inherent in the system of 
the Treaty since it permits the national court, for the matters within its jurisdiction, 
to ensure the full effectiveness of Community law when it determines the dispute 
before it. 
[52] It is apparent from paragraph 115 of that judgment, and from the case-law 
which is cited there, that, although the principle that national law must be 
interpreted in conformity with Community law concerns chiefly domestic 
provisions enacted in order to implement the directive in question, it does not 
entail an interpretation merely of those provisions but requires the national court 
to consider national law as a whole in order to assess to what extent it may be 
applied so as not to produce a result contrary to that sought by the directive. 
[53] Under the settled case-law of the Court, national rules such as those at issue 
in the main proceedings, which are intended to transpose the provisions of 
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directives into the domestic legal order, must respect the general principles of 
Community law (judgment of 10 September 2009, Plantanol, C-201/08, 
EU:C:2009:539, paragraph 44). 
[54] The principles of legal certainty and the protection of legitimate expectations 
form part of the Community legal order. They must accordingly be observed by 
the Community institutions but also by the Member States when they exercise the 
powers conferred on them by Community directives (judgments of 3 December 
1998, Belgocodex, C-381/97, EU:C:1998:589, paragraph 26; of 26 April 2005, 
‘Goed Wonen’, C-376/02, EU:C:2005:251, paragraph 32; and of 21 February 
2008, Netto Supermarkt, C-271/06, EU:C:2008:105, paragraph 18).  
[55] Thus, the interpretation of the fundamental principles of the system of VAT 
falls within the jurisdiction of the Court, even in cases where those principles do 
not concern provisions relating to the transposition of the VAT Directive. The 
Court has interpreted both the principle of legal certainty and the principle of the 
protection of legitimate expectations without directly referring to the provisions of 
the VAT Directive or the TFEU (for example, judgments of 12 May 2021, 
technoRent International and Others, C-844/19, EU:C:2021:378, and of 21 March 
2018, Volkswagen, C-533/16, EU:C:2018:204). 
[56] The principle of legal certainty developed by the Court requires the tax 
position of the taxable person, having regard to that person’s rights and 
obligations vis-à-vis the tax authority, not to be open to challenge indefinitely 
(judgment of 21 March 2018, Volkswagen, C-533/16, EU:C:2018:204, 
paragraph 46 and the case-law cited). 
[57] As regards the principle of legal certainty, the Court has found that that 
principle requires that rules of law be clear and precise and predictable in their 
effect, so that interested parties can ascertain their position in situations and legal 
relationships governed by EU law (judgment of 31 January 2013, LVK, C-643/11, 
EU:C:2013:55, paragraph 51). 
[58] The possibility of an extension which is essentially unlimited in time of a tax 
procedure linked to the right to deduct tax also raises the question of the 
effectiveness of the right of deduction as a fundamental principle of the system of 
VAT, established in numerous judgments of the Court (for example, order of 
3 September 2020, Vikingo Fővállalkozó, C-610/19, EU:C:2020:673, 
paragraph 40 and the case-law cited). 
[59] The provisions at issue, in opening up, in essence, the possibility of a 
suspension of the limitation period which is unlimited in time, may be called into 
question also in view of the fundamental principles of EU law of legal certainty 
and effectiveness. 
[60] Thus, the examination of the question of whether national legislation such as 
that at issue here is compatible with those fundamental principles of the system of 
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VAT falls, in the opinion of this court, within the jurisdiction of the Court 
pursuant to Article 267 TFEU. 
Reasons for the question and this court’s point of view 
[61] As this court has indicated regarding the admissibility of the question, 
making reference to the case-law of the Court, both the principle of legal certainty 
and the principle of the protection of legitimate expectations form an integral part 
of the Community legal order.  
[62] The suspension of the limitation period during judicial review is governed in 
an essentially identical manner by Paragraph 164(5) of the former Code of Tax 
Procedure and Paragraph 203(3) of the new Code of Tax Procedure. 
[63] None of those provisions contains a cut-off date as far as suspension is 
concerned, or provides for any exceptions with regard to decisions of the tax 
authorities which the court considers do not lend themselves to an examination of 
their substance.  
[64] According to the judgment of the Supreme Court […] invoked by the 
defendant [mentioned in paragraph 27 above], limitation is also suspended during 
the judicial review of a decision of the tax authorities which is null and void. This 
court is bound, including in the present proceedings, by that interpretation on the 
part of the Supreme Court.  
[65] It follows therefore from the rules of Hungarian law and the relevant case-
law of the Supreme Court that there is no limit in time on the suspension of the 
limitation period arising from judicial review and that court proceedings 
conducted as a consequence of a decision of a tax authority which is null and void 
are no exception to that either. 
[66] In the present case, the [second] second-level decision was taken only 1 
business day after the first judgment became final, whilst, during the second 
repeat procedure, 76 days of the limitation period elapsed in total.  
[67] It appears that, in a scenario such as that in the present case, where a tax 
authority, following court decisions ordering that a new procedure be conducted, 
repeatedly takes decisions which are illegal (or even null and void) in such a short 
period of time, the limitation period in respect of the right of the tax authority to 
make a tax assessment may be extended by several years, or even, in extreme 
cases, by decades. 
[68] In the opinion of this court, the objective of limitation is to contribute to 
legal certainty. 
[69] The tax review conducted in respect of the applicant began on 13 December 
2011, and the first-level decision was taken on 8 October 2015 and upheld by the 
REQUEST FOR A PRELIMINARY RULING OF 4.10.2021 – C-615/21 
 
14  
decision of the defendant of 6 April 2020, which is the subject of the present 
dispute. Between those two decisions, the tax authority twice repeated the second-
level procedure on account of a court decision. The first repeat procedure took 
place on account of the contradictory nature of the first second-level decision, and 
the second repeat procedure took place because the defendant had failed to 
comply with the guidance contained in the first court decision, so that the second 
second-level decision was null and void. It is therefore due to the fault of the tax 
authority that the procedure has gone on for nearly 10 years from the start of the 
review.  
[70] None of those repeat procedures led to the examination of any evidence. Prior 
to the present court proceedings, the substance of the decisions taken by the tax 
authority concerning the refusal of the benefit of the right of deduction for the 
period under consideration was not once examined by a court. 
[71] The defendant, in the decision which is the subject of the present 
proceedings, repeated the facts established in the first-level decision, taking the 
view that they were accurate, without conducting an evidence procedure, and it 
upheld that decision, whilst clarifying the statement of reasons for the first-level 
decision. 
[72] Given that the evidence on which the decision of 6 April 2020 is based was 
already available on 6 October 2015, on the date of the adoption of the first-level 
decision, the tax authority did not consider that it was necessary to gather new 
evidence and the extension of the procedure was therefore not justified by any 
valid reason but was due exclusively to the shortcomings of the second-level 
decision. 
[73] The principle of effectiveness, which the Court regularly examines in VAT 
cases, requires that the rules of procedure of Member States do not render 
virtually impossible or excessively difficult the exercise of rights based on EU law 
(see, with regard to that concept, judgment of 8 May 2008, Ecotrade, C-95/07 and 
C-96/07, EU:C:2008:267, paragraph 46). 
[74] The Court, in a number of judgments concerning the refusal of the benefit of 
the right of deduction, has stated that the right of taxable persons to deduct the 
VAT due or already paid on goods purchased and services received as inputs from 
the VAT which they are liable to pay is a fundamental principle of the common 
system of VAT. As the Court has repeatedly held, the right to deduct provided for 
in Article 167 et seq. of Directive 2006/112 is an integral part of the VAT scheme 
and in principle may not be limited if the material and formal requirements or 
conditions to which this right is subject are respected by taxable persons wishing 
to exercise it (order of 3 September 2020, Vikingo Fővállalkozó, C-610/19, 
EU:C:2020:673, paragraph 40). 
[75] In the opinion of this court, the result of the unjustified extension, for a 
period which is impossible to predict, of a tax procedure intended to examine the 
NAPFÉNY-TOLL 
 
15 
financial and material conditions of the right of deduction is that it renders the 
exercise of the right of deduction excessively difficult. 
[76] In the light of all of the foregoing considerations, this court questions the 
compatibility of the legislation and related case-law described above with the EU 
principles of legal certainty and effectiveness.  
[77] […] 
[78] […] [procedural elements of national law] 
Szeged, 4 October 2021 
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