Order;Information — ECLI:EU:C:2023:751
Date: 2023-10-05
Language of the case: Slovak
Court formation: Eighth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Slovakia

Translation C-151/23–1 
Case C-151/23 
Request for a preliminary ruling 
Date lodged: 
14 March 2023 
Referring court: 
Najvyšší správny súd Slovenskej republiky (Slovakia) 
Date of the decision to refer: 
30 January 2023 
Applicant: 
ZSE Elektrárne, s.r.o 
Defendant: 
Finančné riaditeľstvo Slovenskej republiky 
  
… 
Najvyšší správny súd       …+ 
Slovenskej republiky       … 
(Supreme Administrative Court of the Slovak Republic, Slovakia) 
ORDER 
The Najvyšší správny súd Slovenskej republiky (Supreme Administrative Court of 
the Slovak Republic) …, in the case brought by the applicant: ZSE Elektrárne, 
s.r.o., … against the defendant: Finančné riaditeľstvo Slovenskej republiky 
(Finance Directorate of the Slovak Republic; ‘the Finance Directorate’) in an 
appeal on a point of law against the judgment of the Krajský súd v Trnave 
(Regional Court, Trnava, Slovakia) … of 12 February 2020, 
orders as follows: 
I. The Najvyšší súd Slovenskej republiky (Supreme Administrative Court of 
the Slovak Republic, Slovakia) hereby stays the proceedings. 
EN 
REQUEST FOR A PRELIMINARY RULING OF 30. 1. 2023 – CASE C-151/23 
 
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II. The following question is referred to the Court of Justice of the European 
Union for a preliminary ruling, pursuant to Article 267 of the Treaty on the 
Functioning of the European Union: 
Must the first paragraph of Article 183 of Directive 2006/112/EC be interpreted 
as precluding national legislation which, as a result of a tax investigation, fixes, 
as the time at which interest on excess value added tax to be refunded is to 
become chargeable, a date later than the date on which that refund would have 
had to be made had a tax investigation not been carried out in the case in 
question? 
Grounds 
1 The request for a preliminary ruling made to the Court of Justice of the European 
Union (‘the Court of Justice’) concerns the interpretation of the first paragraph of 
Article 183 of Council Directive 2006/112/EC of 28 November 2006 on the 
common system of value added tax (‘the VAT Directive’). 
2 The basis for the present request is the legal uncertainty which has arisen in the 
context of a dispute between the applicant, which unsuccessfully claimed interest 
in respect of the refund of excess value added tax for the first quarter of 2008, 
after the expiry of the period laid down in law, and the defendant, as the 
administrative appeal authority. 
Legal context 
European Union law 
3 Article 183 of the VAT Directive provides: 
‘Where, for a given tax period, the amount of deductions exceeds the amount of 
VAT due, the Member States may, in accordance with conditions which they shall 
determine, either make a refund or carry the excess forward to the following 
period. 
However, Member States may refuse to refund or carry forward if the amount of 
the excess is insignificant’. 
Slovak law 
4 The refund of excess VAT is governed in Slovak law by Zákon č. 222/2004 Z. z. 
o dani z pridanej hodnoty (Law No 222/2004 on value added tax; ‘the Law on 
VAT’). 
5 Paragraph 79(1) of the Law on VAT, in the version in force until 30 November 
2008, provides: 
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‘If an excess arises in a tax period, the taxable person shall deduct the excess 
from his or her own tax liability in the next tax period. If the taxable person is 
unable to deduct the excess from his or her own tax liability in the next tax period, 
the tax office shall refund the undeducted excess or the undeducted part thereof 
within 30 days from the date of submission of the tax return for the tax period 
following the tax period in which the excess arose, or within 30 days from the 
expiry of the period for submitting the tax return if the taxable person was not 
obliged to submit a tax return (Paragraph 78(1)) for the tax period following the 
tax period in which the excess arose. For the purposes of this Law, an excess 
means the difference between the total amount of deductible tax for the relevant 
tax period and the total amount of tax for the relevant tax period, except for tax on 
the importation of goods.’ 
6 Paragraph 79(2) of the Law on VAT, in the version in force until 30 November 
2008, provides: 
‘If the tax office instigates, within the period for refunding the excess under 
paragraph 1, an inspection to determine the merits of the request for refund of the 
excess, the tax office shall refund the excess within ten days of completion of the 
inspection. If the taxable person does not allow an inspection to be carried out 
within the period for refunding excess under paragraph (1), the tax office shall 
refund the excess within ten days of the completion of the inspection’. 
7 Paragraph 79a(1) of the Law on VAT, in the version in force until 31 December 
2018, provides: 
‘If the tax authority has instigated a tax inspection within the period for refunding 
the excess pursuant to Paragraph 79(1), (2) or (5) and the excess has not been 
refunded before the expiry of six months from the final day of the period for 
refunding the excess pursuant to Paragraph 79(1), (2) or (5), the taxable person 
shall be entitled to compensation for the withholding of the excess deduction 
(hereinafter referred to as “interest on excess”) pursuant to paragraph 2’. 
8 Paragraph 79a(2) of the Law on VAT, in the version in force until 31 December 
2018, provides: 
‘The taxable person shall be entitled to interest on the excess at twice the basic 
interest rate of the European Central Bank in force on the first day of the calendar 
year in respect of which the interest is calculated, and if twice the basic interest 
rate does not reach 1.5%, an annual interest rate of 1.5% shall be used to 
calculate the interest on the excess. Interest shall be calculated on the amount of 
the excess refunded for each day after the expiry of six months from the date 
following the expiry of the period for refunding the excess pursuant to 
Paragraph 79(1), (2) or (5), up to and including the date of refund’. 
REQUEST FOR A PRELIMINARY RULING OF 30. 1. 2023 – CASE C-151/23 
 
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Main proceedings 
9 On 27 December 2011, the applicant requested payment of interest on the excess 
value added tax to be refunded for the tax period of the first quarter of 2008, after 
the statutory period, in the total amount of EUR 139 953.47. That request was 
refused by the tax authority in a decision which was upheld by the defendant 
following consideration of the appeal brought by the applicant. The decisions of 
the defendant and the tax authority were subsequently annulled on the basis of an 
administrative appeal brought by the applicant, and the case was remitted to the 
tax authority for further prosecution. 
10 In that further prosecution, the tax authority, in a decision … of 7 June 2018, 
dismissed the request for the payment of interest. On the basis of the appeal 
brought by the applicant, the defendant, in a decision … of 3 October 2018, 
upheld the decision of the tax authority. 
11 It was clear in particular from the tax authority’s statement of grounds that the 
excess for the first quarter of 2008 was refunded in full within the statutory period 
under Paragraph 79(2) of the Law on VAT within 10 days of completion of the 
inspection, and therefore the excess, in its view, was not unlawfully withheld and 
thus no entitlement to penalty interest for unlawfully withheld funds arose under 
Paragraph 35b(6) of the Zákon o správe daní a poplatkov (Law on administration 
of taxes and fees). As the excess was refunded to the applicant within the statutory 
period, it was not entitled to interest under Paragraph 63(6) of the Law on 
administration of taxes and fees. 
12 The defendant disagreed with the applicant’s view that, on an interpretation of the 
Law on the administration of taxes and fees in a manner consistent with EU law, it 
is entitled to financial compensation in the form of interest for the fact that it was 
deprived of funds amounting to EUR 3 338 759.28 between 23 August 2008 and 
24 November 2008. The defendant pointed out that the Law on administration of 
taxes and fees in force at that time merely placed on the tax authority an 
obligation to impose penalties for any failure to comply with the time limits for 
refunding funds, but did not place on it an obligation of a compensatory nature, 
where compensating the taxable person for the withholding of excess tax would 
only be possible in connection with a tax inspection, with those funds refunded 
within the statutory period, as occurred in the present case. With reference to the 
case-law of the Court of Justice of the European Union (‘the Court of Justice’), 
the defendant noted that the Court of Justice itself accepts in its case-law that, in 
the event of a tax inspection, the funds claimed by the taxable person will be 
withheld, precisely on account of the inspection, whilst repeatedly referring to a 
reasonable period of time in connection with the withholding of those funds. 
Proceedings before the national courts 
13 The applicant brought an administrative appeal against the decision at issue before 
the Krajský súd v Trnave (Regional Court, Trnava, Slovakia; ‘the administrative 
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court’), which was dismissed by the administrative court. As grounds, the court 
stated inter alia that 
- the legal instrument in the form of compensation for the withholding of 
excess tax in the course of a tax inspection under Paragraph 79a of the Law on 
VAT was only incorporated into that law with effect from 1 January 2017, while, 
under the transitional provision contained in Paragraphs 85ke, 79a does not apply 
if the tax inspection was completed by 31 December 2016; 
- according to the opinion of … the Najvyšší súd Slovenskej republiky 
(Supreme Court of the Slovak Republic, Slovakia) of 30 October 2019 … (‘the 
opinion of the Supreme Court’), the rule contained in the second sentence of 
Paragraph 85ke of the Law on VAT is incompatible with EU law (in particular, 
with the order of the Court of Justice of 21 October 2015 in Case C-120/15, 
Kovozber [not published]) and, in order to ensure compatibility with EU law, 
public administrations and courts are obliged to disapply that provision; 
- having regard to the abovementioned opinion of the Supreme Court, the 
provision on compensation for withholding excess tax during a tax inspection 
under Paragraph 79a of the Law on VAT, in the version in force since 1 January 
2017, can be applied to the present case ex tunc, that is to say, without applying 
the transitional provision contained in Paragraph 85ke of the Law on VAT to the 
provision contained in Paragraph 79a of that law; 
- the administrative court did not take the view that annulment of the 
contested decision and remitting the case to the defendant for further prosecution 
were in accordance with the principles of economy since the operative part of the 
decision is consistent with the facts; 
- in the fresh proceedings, the defendant, having regard to the opinion of the 
Administrative Chamber of the Supreme Court, would not have reached a more 
favourable outcome in the case since the excess tax was refunded to the applicant 
in accordance with Paragraph 79(2) of the Law on VAT and was at the same time 
refunded within six months of the final day of the period for refunding excess tax 
under Paragraph 79(1) and (2) of the Law on VAT. 
14 The applicant brought an appeal on a point of law against the judgment of the 
administrative court, in which, referring to the case-law of the Court of Justice 
concerning Article 183 of the VAT Directive, it stated that, according to that case-
law, the right to interest arises where the excess tax has not been refunded at the 
time when it should normally have been refunded, and therefore the condition 
relating to the expiry of the additional six-month period laid down in 
Paragraph 79a of the Law on VAT is incompatible with that article of the 
directive. 
15 It accordingly requested that the court hearing the appeal on a point of law refer 
the following question to the Court of Justice for a preliminary ruling: 
REQUEST FOR A PRELIMINARY RULING OF 30. 1. 2023 – CASE C-151/23 
 
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‘Must the first paragraph of Article 183 of Directive 2006/112/EC be interpreted 
as precluding national legislation under which one of the conditions for granting 
interest for late refunding of value added tax (where a tax inspection is carried 
out and the refund of the value added tax is made only after completion of the tax 
inspection, within a period of ten days) is that the refund of the value added tax be 
made only after the expiry of more than six months after the date on which that 
refund would have been made had the tax inspection not been carried out in the 
case in question?’ 
16 By letter of 9 July 2021, the applicant supplemented its request for a preliminary 
ruling as follows: 
‘If the answer to the first question is in the negative, must the first paragraph of 
Article 183 of Directive 2006/112/EC be interpreted as meaning that national 
case-law is compatible with it, according to which, in order to assess whether a 
taxable person is entitled to interest on funds withheld which constitute excess 
value added tax, national legislation is applicable which, however, entered into 
force only after a tax inspection of the taxable person had been carried out and 
excess value added tax had been paid?’ 
17 In response, the defendant stated that it considers the contested judgment to be 
correct in fact and in law, disagrees with the applicant’s arguments, and requests 
that the appeal on a point of law be dismissed. 
The question referred 
18 The above question has been referred by the referring court on the basis of a 
request by the applicant. The principal question in the present case is whether 
national legislation which provides that, as a result of a tax inspection, the time at 
which default interest is due on the amount to be refunded is a date later than the 
date on which that refund would have been due had the tax inspection not been 
carried out, is compatible with the objectives of the VAT Directive. As a 
consequence of that national legislation, it is a condition for entitlement to interest 
that the refund of the amount be made more than six months after the date on 
which the normal period for refunding it would otherwise have expired (had there 
been no tax inspection). 
19 At the time the tax inspection of the applicant was carried out in 2008 there was 
no explicit provision on interest in Slovak law, but the right to interest arises from 
the case-law of the Court of Justice, which interprets Article 183 of the VAT 
Directive as meaning that in such a case the taxable person concerned is entitled to 
interest. Having regard to that case-law, Zákon č. 297/2016 Z. z. (Law 
No 297/2016) introduced a new provision, namely Paragraph 79a of the Law on 
VAT, under which the taxable person is entitled to interest if the tax office refunds 
the excess tax after the expiry of six months following the expiry of the normal 
period within which the excess tax should have been refunded (the normal period 
being 30 days after the submission of the tax return for the next tax period). 
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20 At the same time, under the transitional provision contained in Paragraph 85ke of 
the Law on VAT, Paragraph 79a is to apply only to tax inspections which were 
completed after 1 January 2017. However, according to the case-law of the 
national courts, influenced by the opinion of the Supreme Court of the Slovak 
Republic, Paragraph 79a of the Law on VAT is to be applied to all tax inspections, 
even previous ones. 
21 By contrast, the case-law of the Court of Justice adopts an interpretation of 
Article 183 of the VAT Directive according to which a right to interest arises in 
the case where the excess tax has not been refunded at the time when it should 
normally have been refunded. In the applicant’s view, the condition relating to 
expiry of a further six months, introduced by Paragraph 79a of the Law on VAT, 
is therefore incompatible with Article 183 of the VAT Directive and the case-law 
of the Court of Justice cited below. 
22 In its judgment of 18 December 1997 in Molenheide and Others (C-286/94, 
C-340/95, C-401/95 and C-47/96, EU:C:1997:623), the Court of Justice 
interpreted Article 18(42) of Council Directive 77/388/EEC and, in response to 
the question referred, found that the principle of proportionality is infringed by 
provisions which count the right to interest from a date other than the date on 
which, in the normal course of events, the deduction would have been refunded. 
23 Furthermore, in its judgment of 12 May 2011, Enel Maritsa Iztok 3 (C-107/10, 
EU:C:2011:298), the Court of Justice, referring to the judgment in Molenheide 
and Others, held that ‘Article 183 of Directive 2006/112, as amended by Directive 
2006/138, in the light of the principle of fiscal neutrality, is to be interpreted as 
precluding national legislation under which the normal period for refunding 
excess valued added tax, at the expiry of which default interest is payable on the 
sum to be refunded, is extended where a tax investigation is instigated, the effect 
of the extension being that such interest is payable only from the date on which 
the investigation is completed, the excess having already been carried forward 
during the three tax periods following that in which it arose. On the other hand, 
the fact that the normal period is 45 days is not contrary to that provision’. 
24 In its judgment of 24 October 2013, Rafinăria Steaua Română (C-431/12, 
EU:C:2013:686, paragraphs 22 to 24), the Court of Justice held, to the same 
effect, that ‘conditions for the refund of excess VAT cannot undermine the 
principle of fiscal neutrality of the VAT system by making the taxable person bear 
the burden of the VAT in whole or in part, which implies that the refund is made 
within a reasonable period of time (Enel Maritsa Iztok 3, paragraph 33). 
For the same reasons, when the refund to the taxable person of the excess VAT 
is not made within a reasonable period, the principle of fiscal neutrality of the 
VAT system requires that the financial losses incurred by the taxable person 
owing to the unavailability of the sums of money at issue be compensated through 
the payment of default interest. 
REQUEST FOR A PRELIMINARY RULING OF 30. 1. 2023 – CASE C-151/23 
 
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In that respect, it follows from the case-law of the Court that the calculation of the 
interest payable by the Treasury which does not take as its starting point the date 
on which the excess VAT would have had to be repaid in the normal course of 
events in accordance with the VAT Directive would be contrary, in principle, to 
the requirements of Article 183 of that directive (Enel Maritsa Iztok 3, 
paragraph 51). It is apparent from the order for reference that, in the main 
proceedings, the applicable national law provides, in principle, for the calculation 
of default interest from the expiry of a period of 45 days for reaching a 
determination on VAT returns.’ 
25 Finally, in its order of 21 October 2015, Kovozber, (C-120/15, EU:C:2015:730, 
[not published]), after recapitulating the findings established in Enel Maritsa Iztok 
3 (C-107/10, EU:C:2011:298, paragraph 51) the Court of Justice held that ‘the 
period for refunding excess VAT may, as a general rule, be extended in order to 
carry out a tax investigation without there being any need for such an extended 
period to be regarded as unreasonable provided that the extension does not go 
beyond what is necessary for the successful completion of the investigation. 
However, the Court of Justice has pointed out that if the taxable person is 
deprived on a temporary basis of funds corresponding to the excess VAT, he is at 
an economic disadvantage which must be compensated for by payment of interest 
[…]’ (paragraph 23) and that ‘where excess VAT is refunded to a taxable person 
after a reasonable period has elapsed, the principle of the neutrality of the VAT 
system requires that the financial loss thus incurred by the taxable person owing 
to the unavailability of the sums of money at issue be compensated though the 
payment of default interest’ (paragraph 24). 
26 In response to the order in Kovozber (C-120/15, EU:C:2015:730, [not published]), 
the national legislature adopted the rule on interest at issue contained in the 
abovementioned provision of Paragraph 79a of the Law on VAT. According to the 
explanatory memorandum relating to that rule, the national legislature proposed 
that the taxable person should ‘have a right to interest if the period during which 
the excess is withheld is longer than six months from the date of expiry of the 
period for refunding the excess. This therefore gives the State a certain period of 
time to exercise its power to check the eligibility of the excess, while at the same 
time the retention period does not give rise to a claim for interest on the excess’. 
27 Therefore, in the present case, the court hearing the appeal on a point of law, even 
after taking account of the judgments of the Court of Justice cited above, is unsure 
whether the rule on interest laid down in Paragraph 79a of the Law on VAT is 
compatible with those judgments and with Article 183 of the VAT Directive. 
28 In its case-law the Court of Justice has ruled that ‘… the period for refunding 
excess VAT may, as a general rule, be extended in order to carry out a tax 
investigation without there being any need for such an extended period to be 
regarded as unreasonable […]’ and that ‘where excess VAT is refunded to a 
taxable person after a reasonable period has elapsed, the principle of the 
neutrality of the VAT system requires that the financial loss thus incurred by the 
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taxable person owing to the unavailability of the sums of money at issue be 
compensated though the payment of default interest’ [order in Kovozber, s.r.o. 
(C-120/15, EU:C:2015:730, paragraphs 23 and 24)]. 
29 The positions indicated above lead to the view that the period for refunding excess 
VAT may be extended for the purposes of carrying out a tax inspection without 
the need to consider that period unreasonable, and compensation for that 
withholding should be due to the taxable person only when the excess VAT is 
refunded to him or her after the expiry of a reasonable period of time. In that case, 
a rule which provides that a right to interest arises in connection with a tax 
inspection initiated on a date later than the date on which, had the inspection not 
been carried out (namely in the normal course of events), the excess VAT would 
have been refunded, would appear to be permissible. It would therefore be for the 
referring court to determine whether, in that case, the six-month period is 
reasonable. 
30 Such an interpretation, however, is already manifestly contrary to the positions of 
the Court of Justice, set out in the case-law cited above, that ‘calculation of the 
interest payable by the Treasury which does not take as its starting point the date 
on which the excess VAT would have had to be repaid in the normal course of 
events in accordance with the VAT Directive would be contrary, in principle, to 
the requirements of Article 183 of that directive’ (judgments cited above: Enel 
Maritsa Iztok 3, paragraph 51; Rafinăria Steaua Română, paragraph 24; order in 
Kovozber, paragraph 22, and, to the same effect, also judgment in Molenheide and 
Others cited above, paragraphs 63, 64). 
31 The resulting uncertainty as to the interpretation of EU law has induced the 
highest administrative court of the Slovak Republic to refer the abovementioned 
[question] for a preliminary ruling. 
32 The Supreme Administrative Court of the Slovak Republic notes that in the 
present dispute it is acting as a court hearing an appeal on a point of law against 
whose decisions, under Paragraph 438(1) of the Správny súdny poriadok (Code of 
Administrative Court Procedure), there is no right of appeal. 
33 Under [the third paragraph of] Article 267 TFEU, where a question is raised in a 
case pending before a court or tribunal of a Member State against whose decisions 
there is no judicial remedy under national law, that court or tribunal is required to 
bring the matter before the Court of Justice of the European Union. 
Grounds for staying the national proceedings 
… [This section concerns the grounds for staying the national proceedings] 
…