Judgment;Summary — ECLI:EU:C:2021:867
Date: 2021-10-21
Language of the case: Hungarian
Court formation: Third Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Hungary

summary of the grounds for the appeal and the reasons for the request 
for a preliminary ruling 
[1] The applicant, a company incorporated in Belgium, owns the CHEP European 
pallet factory: it used to buy the new pallets and then rent them to its companies, 
which operated in different EU Member States. Its invoices for renting the pallets 
were issued under a Belgian tax number. 
REQUEST FOR A PRELIMINARY RULING OF 2. 7. 2020 – CASE C-396/20 
 
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[2] On 28 September 2017, the applicant, as a taxable person established in another 
Member State of the Community, submitted an application for a refund of the 
input VAT on goods and services purchased in the national territory during the 
period from 1 January 2016 to 31 December 2016. Attached to the application was 
a document containing various columns labelled invoice number/invoice 
date/invoice issuer/taxable amount/tax/tax deductible/denomination/codes, 
together with the invoices referred to in the document. In the document, the 
applicant also listed invoices in respect of which it had already received a full or 
partial VAT refund, and invoices in which the actual amount of VAT stated in the 
invoice was less than the amount stated in the application. The document also 
included cases where the actual amount of VAT stated in the invoice was more 
than the amount stated in the application. 
[3] On 2 November 2017, the first-tier tax authority asked the applicant to provide 
documents and statements regarding the circumstances surrounding the financial 
transactions relating to 143 invoices. After receiving the additional details on 
29 November 2017, the first-tier tax authority upheld the application in part, 
authorising a VAT refund of HUF 254 636 343 and refusing the refund of 
HUF 92 803 004. The refusal was made partly on the ground that the amount 
claimed had already been fully or partially refunded, and partly on the ground that 
Paragraph 247(3) of the VAT Law does not permit the refund of an amount of tax 
in excess of the amount stated in the invoice. In those cases where the amount of 
VAT stated in the document attached to the application was less than the VAT 
stated in the invoice, the first-tier tax authority approved the refund of the amount 
stated in the attachment. 
[4] The defendant confirmed the first-tier decision. The ground for its decision was 
that the amount of the refund applied for is the most important element of the 
application, and any alteration to that amount gives rise to a new application. The 
correction of the administrative error invoked by the applicant in its appeal would 
also entail a new application. The applicant was unable to submit a new 
application because, although it was entitled to submit an application for the year 
in question from the start of the following year, that is, from January 2017, it did 
not do so until 28 September 2017, and the application period expired on 
30 September 2017. The applicant was responsible for misstating the amount of 
the claim and for the date of the application. In the applicant’s case, there was 
clear evidence to support the facts, and no corrective action was necessary. Where 
an application has been completed incorrectly, the tax authority cannot be required 
to verify the reason for the error. 
[5] The applicant brought an action under administrative law seeking a review of the 
defendant’s decision in respect of the invoices for which, based on the information 
in the document attached to the application, the defendant had determined a VAT 
refund that was less than the actual amount of VAT stated in the invoices. 
[6] In a final judgment, the court of first instance dismissed the administrative-law 
action brought by the applicant. According to the grounds in the judgment, it is for 
CHEP EQUIPMENT POOLING 
 
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the applicant to assert the right to a refund, to initiate the procedure and to 
determine the amount of VAT eligible for a refund. The argument invoked by the 
applicant would render the application meaningless since, on that basis, it would 
be sufficient merely to attach the invoices that provide the legal basis for the 
entitlement to a refund and, other than in the case of a proportional deduction, the 
tax authority would invariably have to order a refund of the maximum amount of 
tax as recorded in the invoices. Additional information may be requested by the 
defendant only where it is needed in order to arrive at a reasoned decision or 
where the relevant information is missing, which was not the case here. 
[7] In its appeal on a point of law, the applicant is seeking to have the final judgment 
overturned and to obtain judgment upholding the claims in its administrative-law 
action. In its opinion, the final judgment breaches the principle of tax neutrality 
established in Article 1(2) of Council Directive 2006/112/EC of 28 November 
2006 on the common system of value added tax (‘Directive 2006/112’). The court 
of first instance did not take into account the fundamental principle of the right to 
due process in tax matters, but merely verified that the refund procedure complied 
with the technical rules. 
[8] When hearing the appeal on a point of law, the Supreme Court observed that the 
applicable rules contain no limit on the number of refund applications that may be 
submitted during the refund period; in other words, applicants may correct 
previous possible errors by submitting new applications. However, where an 
application is submitted close to the expiry of the application period, the correct 
interpretation of the question whether a reasoned decision can be made on an 
application where discrepancies between [the amount of VAT stated in the 
application and the amount stated in the invoices submitted] remain unresolved 
assumes vital importance. 
[9] The EU law and the national law applicable to the facts at issue contain identical 
provisions. Both Article 8(2)(e) of the directive and Paragraph 4(2)(e) of the 
Order of the Minister of Finance stipulate that the amount of VAT must be 
included in the application. Under both Article 20(1) of the directive and 
Paragraph 251/F(3) of the VAT Law, a decision on the refund can be made only if 
all the relevant information on which to make a reasoned decision has been 
received. According to both the directive and the VAT Law, the precise amount of 
the refund applied for constitutes relevant information that is needed in order to 
make a reasoned decision. Under the directive, additional information may be 
requested in respect of ‘relevant information’ where there are reasonable doubts 
regarding the validity or accuracy of a particular claim. Under the VAT Law, the 
taxable person may also be asked to provide such information where there are 
reasonable doubts regarding the amount of the refund of input tax applied for.  
[10] The national tax authority considers that it is for the applicant to determine the 
scope of the case, and that, therefore, doubts over the amount of the claim for a 
VAT refund can arise only in connection with an error in the financial transaction 
or where the amount exceeds the amount permitted by law. 
REQUEST FOR A PRELIMINARY RULING OF 2. 7. 2020 – CASE C-396/20 
 
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[11] With regard to the directive, the question to be decided is whether, in the event of 
a discrepancy that is detrimental to the taxable person, the national tax authority 
may deem that it has received all the relevant information on which to make a 
reasoned decision in respect of the refund, without requesting additional 
information. In other words, the issue is whether the discrepancy between the 
amount stated in the application and the invoices submitted does not constitute 
relevant information in respect of which the tax authority must request additional 
information, [with the result that the authority] is not required to draw attention to 
the errors in the application in this regard. 
[12] However, in the view of the Supreme Court, the national tax authority may have 
reasonable doubts over the accuracy of the application even where the amount of 
the VAT refund applied for is less than the amount stated in the invoice, and even 
where the application incorrectly states a taxable amount for VAT purposes that 
differs from the amount stated in the invoice. In these circumstance too, a 
reasoned decision may be made only after additional information has been 
requested. 
[13] […] [procedural considerations of domestic law] 
Budapest, 2 July 2020. 
[…] [signatures]