Information;Order — ECLI:EU:C:2025:107
Date: 2025-02-12
Language of the case: Hungarian
Court formation: Sixth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling - inadmissible
Origin: Hungary

Summary C-262/24 – 1 
Case C-262/24 
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: 
12 April 2024 
Referring court: 
Fővárosi Törvényszék (Hungary) 
Date of the decision to refer: 
29 February 2024 
Applicant: 
Pegazus Busz Fuvarozó Kft. 
Defendant: 
Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága 
  
Subject matter of the main proceedings 
Challenge to the administrative rulings denying value added tax (VAT) deductions 
on invoices issued by subcontractors. 
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-262/24 
 
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Questions referred for a preliminary ruling 
1. Do Article 167, point (a) of the first paragraph of Article 168 and point (a) 
of the first paragraph of Article 178 of the VAT Directive, as well as the right 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 proportionality and legal certainty, preclude the 
practice of the tax authority whereby: 
(a) the taxable person is denied the right to deduct VAT, despite 
acknowledgement that the economic transaction shown on the invoice took place, 
on the grounds that, from all the circumstances deemed relevant – such as the use 
of subcontractors, the personal, organisational and ownership ties revealed, the 
behaviour towards workers of the person designated in the main contract between 
the client and the applicant as responsible for maintaining daily contact and the 
fact that the working conditions of workers remained unchanged with successive 
subcontractors – it could be inferred that the applicant’s behaviour was contrary to 
the requirements of a legitimate exercise of the right and the economic activity is 
therefore considered to be contrived and created for the sole purpose of obtaining 
a tax advantage contrary to the purpose of the legislation on VAT, although the 
disputed circumstances necessarily follow from contractual freedom in the private 
sector, as well as the civil, labour and tax regulations governing those contracts, 
and there is no causal link to the right of the taxable person to deduct VAT? 
(b) it is considered tax avoidance if the issuer of the invoice is in arrears in the 
payment of taxes declared and contributions, even if the tax authority gives the 
issuer the option to pay in instalments to rectify the situation and eventually 
recovers the amount owed in an enforced collection procedure against the 
subcontractor, so that there is no cost to the public purse, or does only 
concealment of tax from the tax authority, that is to say, failure to declare and pay 
tax, constitute fraudulent conduct? 
(c) on the ground of tax secrecy, the tax authority does not inform the taxable 
person during the proceedings of the conduct that allegedly constitutes tax 
avoidance – that is to say, the nature of the non-compliance with the obligation to 
pay tax and contributions – and, therefore, does not identify the subcontractor 
specifically affected by the non-compliance, the type of tax (or contribution) or 
the scope and period of the non-compliance, but merely makes generic references 
to that effect? 
(d) as a prerequisite for the exercise of the right to deduct, by merely claiming 
that there are personal and organisational ties between the taxable person and the 
subcontractor, the tax authority not only imposes on the taxable person an 
obligation to carry out checks (on the tax liability of the subcontractor) for which 
it is not responsible and is not even authorised but, solely on the basis of that 
circumstance, presumes that the taxable person knows about the subcontractor’s 
tax liability, without carrying out an examination of the knowledge of the taxable 
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person and whether that knowledge could be obtained lawfully (taking into 
account tax secrecy), physically and logically? Is the fact that personal and 
organisational ties have been established by private individuals relevant when 
considering that that knowledge has been demonstrated? 
(e) without conducting a thorough examination of the relevant legal basis, the 
tax authority determines who is the employer with whom the worker has an 
employment relationship based not on the employment contract establishing the 
employment relationship, the identity of the person who registers employment 
relationships or the concordant declaration of the employers and employees – 
which confirms the documents – but on the statement to the contrary of two 
workers (currently only one), on the circumstances on the basis of which 
employment relationships were established with former subcontractors, on the 
similarities in working conditions and on the behaviour of the manager of the 
main employer, who is also the contact person under the main contract? 
(f) that tax authority applies its findings regarding previous periods literally to 
subsequent periods, without taking into account changes in the relevant facts in 
each period, in particular the disappearance of personal and organisational ties, 
and, despite such changes in the facts, does not examine the effect of those 
changes, in the period in question, on the tax authority’s assessment of whether 
there was an abuse of rights, the contrived nature of the economic activity, 
whether there was fraudulent conduct or the knowledge of the taxable person in 
that regard? 
2. In view of the answer to the previous question, are the aforementioned 
articles of the VAT Directive and, in particular, the principle of legal certainty 
consistent with the principle established in case-law according to which, where a 
personal tie can be established between the applicant and the issuers of the 
invoices that may also affect the implementation of the invoiced economic 
transaction, it can be concluded, without additional examination of the knowledge 
of the taxable person, that the latter is aware of the tax avoidance arising from 
unpaid tax? 
3. Does the overall conduct of the tax authority as described comply with the 
obligation incumbent upon that authority to prove, to the requisite legal standard, 
the objective circumstances as regards VAT deduction, or does it constitute an 
assessment based on assumptions and suppositions, 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? 
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: 
– a situation in which the national court of last instance, claiming that there are 
differences in the factual circumstances, does not implement the decision of the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-262/24 
 
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Court of Justice on the grounds that the subject matter of the proceedings that led 
to the decision of the Court of Justice is a delivery of goods, whereas the subject 
matter of the proceedings before it is a provision of services, or on the grounds 
that the objective circumstance relied on in the case before it is only one of the 
objective circumstances assessed in the applicable decision of the Court of Justice, 
and therefore only part of it at most would be relevant; 
– a situation in which the national court of last instance, 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 guidelines 
given by the court of last instance – without referring a question for a preliminary 
ruling – if it deems those guidelines contrary to EU law, or if, following 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 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? 
Provisions of European Union law relied on 
Article 47 of the Charter of Fundamental Rights of the European Union. 
Article 9, Article 167, point (a) of the first paragraph of Article 168, point (a) of 
the first paragraph of Article 178, Article 220 and Article 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 of 21 June 2012, Mahagében and Dávid (C-80/11 and C-142/11, 
EU:C:2012:373); and of 1 December 2022, Aquila Part Prod Com (C-512/21, 
EU:C:2022:950); and orders of 3 September 2020, Vikingo Fővállalkozó 
(C-610/19, EU:C:2020:673); of 3 September 2020, Crewprint (C-611/19, 
EU:C:2020:674); and of 9 January 2023, A.T.S. 2003 (C-289/22, EU:C:2023:26). 
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Provisions of national law relied on 
Paragraph 1(7), Paragraph 2(1) and Paragraph 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). 
Paragraph 119(1), point (a) of the first subparagraph of Paragraph 120 and 
Paragraph 127(1)(a) of the az általános forgalmi adóról szóló 2007. évi CXXVII. 
törvény (Law No CXXVII of 2007 on value added tax). 
Paragraph 110 and Paragraph 115(2) of the a közigazgatási perrendtartásról szóló 
2017. évi I. törvény (Law No I of 2017 on administrative justice). 
Succinct presentation of the facts and procedure in the main proceedings 
1 Pegazus Busz Kft. (‘the applicant’) entered into a contract with Bombardier 
Transportation Hungary Kft. (‘the client’) for the provision of road-based 
passenger transport services for the period between 1 September 2012 and 30 June 
2016. To provide those services, the applicant used various subcontractors for 
successive periods: Pegazus Travel Kft., Zoccoli Építőipari Kft., Déda Szerviz 
Kft. and HEPA Busz Kft. However, the same staff carried out the transport for the 
duration of the contract. 
2 The main proceedings refer to the second, third and fourth quarters of 2015, 
periods in which the applicant’s subcontractor was Déda Szerviz Kft. There had 
been family or friendship ties between the owners and managers of those two 
companies, but those had disappeared during the period covered by the main 
proceedings. Both companies also had branches at the same address. There were 
also similar ties between the applicant and some of the other subcontractors. 
3 Déda Szerviz Kft. had fallen significantly behind in the payment of its employer 
contributions. To rectify that situation, it asked to pay in instalments, to which the 
tax authority agreed. However, due to compound interest, the debt continued to 
grow and, when the company was no longer able to meet payments, the tax 
authority sold its buses at public auction and withdrew its tax identification 
number. The applicant was then forced to use a new subcontractor. 
4 As a result of a tax inspection carried out by the first-level tax authority, that 
authority handed down two decisions establishing a tax liability, resulting from 
the denial of the right to deduct, to be paid by the applicant in VAT in respect of 
the aforementioned tax years. The Nemzeti Adó- és Vámhivatal Fellebbviteli 
Igazgatósága (Appeals Directorate of the National Tax and Customs Authority, 
Hungary; ‘the defendant’), as the second-level tax authority, confirmed those 
decisions. 
5 According to the defendant, the contractual relationships between the applicant 
and its subcontractors were devoid of any real economic content and were used, 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-262/24 
 
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on the one hand, to avoid its obligations to pay contributions for workers, and on 
the other hand, significantly to reduce the applicant’s tax liability in the long term 
through invoices issued by subcontractors. Due to its personal and organisational 
ties with the subcontractors, the applicant knew, or should have known, that it was 
participating in tax avoidance operations. Consequently, a VAT deduction cannot 
be accepted based on those invoices. 
6 The applicant filed an appeal against those decisions before the referring court. In 
its judgment, that court varied the defendant’s decisions and cancelled the 
applicant’s tax liability, as well as the tax penalty and surcharges for late payment. 
The statement of reasons for that judgment referred to the judgment of 21 June 
2012, Mahagében and Dávid (C-80/11 and C-142/11, EU:C:2012:373), and the 
order of 3 September 2020, Crewprint (C-611/19, EU:C:2020:674). In particular, 
it stated that non-payment or partial payment of VAT or contributions by the 
subcontractor issuing the invoices cannot in itself result in denial of a VAT 
deduction, nor can the fact that the defendant believed that the use of the 
subcontractor was not economically reasonable or that there was an organisational 
or personal tie between the taxable person and the issuer of the invoice. 
7 The Kúria (Supreme Court, Hungary), which heard the appeal, set aside the 
judgment of the referring court and ordered it to initiate new proceedings. In its 
view, on the one hand, it can be inferred from all the circumstances and the 
personal, organisational and ownership ties revealed that the invoices were 
fictitious; on the other hand, in issuing supporting documents, the subcontractors 
allowed the applicant to carry on its activities without paying tax and 
contributions, but deducting VAT. This is confirmed by the fact that the workers 
carrying out the services were always the same for the duration of the contract 
with the client and its employment relationships were not affected. Their tasks and 
wages were the same, regardless of the subcontractor for whom they worked. 
Therefore, the purpose of those agreements was not to obtain the income that the 
market offers, but to obtain an unlawful tax advantage. Due to the aforementioned 
ties, the applicant should have known about the subcontractors’ activities, their 
economic situation and their willingness to pay tax and contributions. 
8 Consequently, the Kúria (Supreme Court) provided the referring court with 
guidelines, when taking its new decision, to take into account the aforementioned 
assessments, as well as those contained in similar decisions of the Kúria (Supreme 
Court) handed down as a result of decisions of the tax authority relating to 
previous tax years based on the same facts. Those guidelines are binding on the 
lower court pursuant to Paragraph 110(3), in conjunction with Paragraph 115(2), 
of the a közigazgatási perrendtartásról szóló 2017. évi I. törvény (Law No 1 of 
2017 on administrative justice). 
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The essential arguments of the parties in the main proceedings 
9 The applicant claims that it subcontracted the operations in question because it 
wanted to focus on other activities. Its own contract with the client stipulated that 
its managers had to be in direct contact with the bus drivers, who were employees 
of the subcontractors. Furthermore, the personal ties between the applicant and its 
subcontractor relied on by the defendant no longer existed in the period covered 
by the main proceedings. The fact that the group of employees was always the 
same, despite successive changes of subcontractor, was explained by the fact that 
the nature and frequency of the transport services that had to be provided required 
local drivers, who were limited in number. 
10 According to the defendant, the subcontracting was devoid of any real economic 
content. Through personal and organisational ties with the subcontractors, it was 
actually the applicant’s representative who exercised employer’s rights over the 
workers throughout the period covered by the inspection. The subcontracting was 
carried out with the sole purpose of allowing the applicant to avoid paying 
contributions for the workers and to reduce its tax liability by deducting VAT 
from the invoices issued by the subcontractors. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
11 To begin with, the referring court submits that, in the main proceedings, the 
requirements for VAT deduction laid down in the judgment of 21 June 2012, 
Mahagében and Dávid (C-80/11 and C-142/11, EU:C:2012:373), have been met: 
the applicant is a taxable person; the provision of services was actually carried 
out; it has been proved that the applicant used the services to carry out taxable 
transactions, as evidenced through supporting documents and witness statements; 
and the applicant paid consideration, including VAT, for services rendered, on the 
basis of invoices issued according to the applicable formal requirements. 
12 Regarding point (a) of the first question referred for a preliminary ruling, the 
referring court maintains that, according to the case-law of the Court of Justice, 
choosing the most appropriate organisational and contractual structure to reduce 
the tax burden does not in itself constitute an abuse of rights. The fact that the cost 
of the worker contributions is borne by the subcontractors is based on the 
legislation in force. Furthermore, the contracts between main contractor and 
subcontractor in question stipulated the payment of consideration, which means 
that their purpose was to obtain income. 
13 Regarding point (b) of the first question referred for a preliminary ruling, the 
referring court asks whether the fact that a company is in default with regard to its 
tax liability, in respect of which it requested and was granted payment by 
instalments, although, in the end, the amount of the debt was only recovered 
through an enforced collection procedure, is sufficient in itself to prove the 
existence of tax avoidance. 
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14 Point (c) of the first question referred for a preliminary ruling refers to whether, 
in the main proceedings, the tax authority satisfied the burden of proof as regards 
the classification of the invoicing regime as contrived. In that regard, the referring 
court refers to the judgment of 1 December 2022, Aquila Part Prod Com 
(C-512/21, EU:C:2022:950), in which the Court of Justice held that it is for the tax 
authority to provide a precise description of the constituent elements of the fraud, 
to adduce evidence of the fraudulent conduct and to establish that the taxable 
person participated in that fraud or should have been aware thereof. In the main 
proceedings, it is not clear from the tax authority’s decisions what tax or 
contributions were owed by the subcontractor and the amount thereof. The 
defendant did not disclose that information to the applicant on the ground of tax 
secrecy. 
15 Point (d) of the first question referred for a preliminary ruling refers to the 
contradiction made clear by the fact that the tax authority, with regard to personal 
and organisational ties, expected the applicant, as part of due diligence, to be 
aware of information relating to the subcontractors that constituted tax secrecy, 
while in its decision it did not explicitly mention specific details on the ground 
that they constituted tax secrecy. The referring court also notes that the ties cited 
in the statement of the facts in the main proceedings are more likely to have 
resulted in the disclosure of information in the opposite direction, and that, 
furthermore, such ties had already disappeared during the period in question. 
16 Point (e) of the first question referred for a preliminary ruling refers to the 
defendant’s assessment that, following the transfer of workers from one 
subcontractor to another, their occupational category, duties and pay remained the 
same, which led it to conclude that the applicant acted fraudulently in so far as it 
was in fact the employer, since those workers’ activity was carried out in the 
interest of the applicant. However, the referring court contends that the fact that 
those circumstances remained the same was a necessary consequence of the fact 
that the subject matter of the main contract entered into with the client remained 
unchanged and therefore did not constitute an objective justification for the denial 
of the right to deduct VAT. 
17 With regard to the assessment of the Kúria (Supreme Court) that the workers’ 
employment relationship was not affected, the referring court explains that, 
pursuant to the labour legislation in force at the material time, workers’ freedom 
of choice with regard to the creation of an employment relationship was generally 
limited to the choice of whether or not to sign the employment contract. 
Furthermore, pursuant to the labour legislation in force, it is possible and lawful 
for a new employer to take charge of workers under the same conditions. 
Consequently, the conduct of which the applicant is accused actually arose from 
labour law provisions, was favourable to the workers and, therefore, cannot be 
considered fraudulent conduct. 
18 As regards the intervention of the applicant’s representatives in the worker 
transfer process, to which both the defendant and the Kúria (Supreme Court) 
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attached great importance, the referring court considers that it has no relevance to 
the exercise of the applicant’s right to deduct VAT. Under the contract entered 
into with the client, those persons were responsible for maintaining contact with 
the client. They intervened in that capacity when reporting that the subcontractors 
were taking charge of the workers and their intervention did not affect the creation 
of new employment relationships. 
19 Finally, the referring court considers it necessary to point out that, according to 
the documents in the orders, the vast majority of workers stated that it was the 
manager of Déda Szerviz Kft. who exercised employer rights over them during 
the period in question. The only statement to the contrary contained other factual 
errors that call into question its reliability. 
20 Regarding point (f) of the first question referred for a preliminary ruling, the 
referring court maintains that, as regards Zoccoli Kft. and – from 19 September 
2014 – Déda Szerviz Kft., the personal and organisational ties invoked by the 
defendant no longer existed, and that that had no impact on the workers’ 
employment conditions. Furthermore, following termination of the contract 
between the applicant and the client, the new main contractor, who was 
completely independent of the applicant, also provided services through a similar 
structure and mostly with the same workers. This raises the question of whether 
the defendant is required to take into account the changes in circumstances in its 
decisions relating to subsequent periods or whether it can base them solely on the 
circumstances invoked in relation to previous periods. 
21 By the second question referred for a preliminary ruling, the referring court asks 
whether, on the basis of the case-law of the Court of Justice, there are objective 
circumstances under which the defendant can dispense with the examination of 
the knowledge of the taxable person. 
22 The third question referred for a preliminary ruling refers to whether, as a 
prerequisite for the exercise of the right to deduct VAT, the tax authority can 
legitimately require the taxable person to monitor whether the party with whom it 
contracts has complied with its obligations to declare and pay not just VAT, but 
also other taxes. 
23 The fourth and fifth questions referred for a preliminary ruling relate to the 
contradiction the referring court perceives between the case-law of the Court of 
Justice and national judicial practice in respect of the requirements for restricting 
the right to deduct VAT. In its view, the national courts, claiming differences in 
the facts or objective circumstances, and without referring a question for a 
preliminary ruling, avoided applying the principles set out in the orders of 
3 September 2020, Crewprint (C-611/19, EU:C:2020:674), and of 3 September 
2020, Vikingo Fővállalkozó (C-610/19, EU:C:2020:673). 
24 By the second part of the fourth question referred for a preliminary ruling, the 
referring court wants to know whether, where the Kúria (Supreme Court), in the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-262/24 
 
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context of an appeal, wishes to deviate from a judgment handed down on the basis 
of a decision of the Court of Justice in a case subject to preliminary ruling 
proceedings – due to the contradiction with the legal interpretation outlined in its 
decision – it is required, as the court of last instance, to bring preliminary ruling 
proceedings. 
25 The context of the fifth question referred for a preliminary ruling is the fact that 
the decision of the Kúria (Supreme Court) in the main proceedings – handed down 
without referring a question for a preliminary ruling – was handed down before 
the Court of Justice delivered the judgment of 1 December 2022, Aquila Part 
Prod Com (C-512/21, EU:C:2022:950), and the order of 9 January 2023, A.T.S. 
2003 (C-289/22, EU:C:2023:26), which raise points of law identical to those in 
the present case with regard to the circumstances in which the right to deduct 
VAT was denied, the classification of such circumstances by the tax authority as 
an abuse of rights and the similar system for assessing evidence. However, given 
that the main proceedings are now under way again, the referring court could only 
take those EU decisions into account if it decided to disregard the guidelines given 
by the Kúria (Supreme Court).