Case C-501/24, Klinka-Geo Trans: Request for a preliminary ruling from the Fővárosi Törvényszék (Hungary) lodged on 17 July 2024 – Klinka-Geo Trans Földmunkavégző Ipari, Kereskedelmi és Szolgáltató Kft. v Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága
Date: 2024-07-17
Institutions: Court of Justice
Subjects: VAT, commercial transaction, invoicing, primacy of EU law, principle of legal certainty, right to an effective remedy, right to justice, tax offence, tax relief, taxpayer








C_202405500EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2024/5500


23.9.2024






Request for a preliminary ruling from the Fővárosi Törvényszék (Hungary) lodged on 17 July 2024 – Klinka-Geo Trans Földmunkavégző Ipari, Kereskedelmi és Szolgáltató Kft. v Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága


(Case C-501/24, Klinka-Geo Trans)

(C/2024/5500)
Language of the case: Hungarian

Referring court

Fővárosi Törvényszék

Parties to the main proceedings


Applicant: Klinka-Geo Trans Földmunkavégző Ipari, Kereskedelmi és Szolgáltató Kft.

Defendant: Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága

Questions referred







1.


Do Articles 167, 168(a) and 178(a) of the VAT Directive (1) and the right to an effective remedy and to a fair trial enshrined as a general principle of law in Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), in conjunction with the fundamental principles of fiscal neutrality, effectiveness and legal certainty, preclude the practice of a tax authority whereby – in accordance with the content of paragraphs 1 and 2 of Opinion No 5/2016 of 26 September 2016 issued by the Administrative and Labour Chamber of the Kúria (Supreme Court, Hungary), the national court of last instance – that authority applies the aforementioned provisions drawing a distinction with the effect that, if it declares that the economic transaction reflected in the invoice did not take place, it does not examine whether the recipient of the invoice was or should have been aware of the tax evasion or avoidance, while if, on the other hand, it declares that the economic transaction did take place, but not between the parties shown on the invoice, it examines, on the basis of the facts, whether the recipient of the invoice was or should have been aware of the tax evasion or avoidance?










2.


Do the articles of the VAT Directive, the principles of law referred to above and the tax authority’s legal obligation to provide proof by means of objective facts, preclude a procedure in which that authority:










(a)


as a condition for exercising the right to deduct the tax, and invoking lack of due diligence, imposes an obligation on the taxable person to carry out checks of whether the issuer of the invoice has committed an irregularity that is grounds for invalidity and has no causal link with the obligation to pay VAT or therefore with the exercise of the right of deduction, since, under national and EU law, the obligation to pay VAT exists also where a contract is invalid, once a demonstrable economic result has occurred;










(b)


denies the taxable person the right to deduct tax, without examining due diligence, on the ground that, subsequently to the economic transaction, in reliance on circumstances attributable to the issuer of the invoice in the period covered by the inspection, it has been established that the economic transaction reflected in the invoice did not take place;










(c)


requires that the loss resulting from the unsuccessful witness evidence be borne by the taxable person which furnishes proof by means of an invoice, on the ground that, in order for the deduction of VAT to be allowed, in addition to the invoice, the circumstances in which the invoiced economic transaction took place must be the subject matter of a detailed statement by the taxable persons named on the invoice and by the representatives of the undertakings that participated in any way in the economic transaction, taking into account also the principle established by the Court of Justice according to which rules of evidence laid down in national law may not undermine the effectiveness of EU law?










3.


In the light of the aforementioned provisions of the VAT Directive, Article 47 of the Charter and the primacy of EU law, are the decisions of the Court of Justice containing guidelines on the rules of the VAT Directive concerning the right of deduction and on the circumstances to be assessed in the context of the knowledge of the taxable person applicable in the present case if the tax authority, on the basis of the same circumstances that were examined in the context of that knowledge, determines that the economic transaction did not take place?










4.


Do Article 267 TFEU, the principle of the primacy of EU law and the right to an effective remedy and to a fair trial enshrined in Article 47 of the Charter preclude the fact that a national court of last instance:






(a)


claiming that there are differences in the factual circumstances, in the context of an appeal in which a number of decisions in the field of VAT deduction are examined, does not apply the decisions of the Court of Justice in that field or prohibits them from being relied on in new proceedings, on the ground that, when compared with the circumstances listed in the decision under appeal, the decisions of the Court of Justice contain only indications relating to isolated circumstances, and relying on the distinction in paragraphs 1 and 2 of Opinion No 5/2016 of the Administrative and Social Chamber of the Hungarian Supreme Court, the logic of which means that the decisions of the Court of Justice in VAT cases are not applicable in situations where the tax authority finds that the economic transaction invoiced did not take place, even though it is precisely the legality of that finding that the applicant is challenging in its action;










(b)


after finding that the decisions of the Court of Justice have been misapplied in the case in question, orders the court, in respect of the new proceedings, contrary to what was established in those decisions, to conduct the new proceedings in accordance with the case-law summarised in the – non-binding – opinion of the Administrative and Labour Chamber of the Hungarian Supreme Court and with the case-law subsequent to the adoption of that opinion;










(c)


in connection with appeal proceedings, deviates from the judgment of the Court of Justice in the case in question as a result of preliminary ruling proceedings and takes a decision contrary to that judgment without bringing preliminary ruling proceedings itself, despite the contradictions with regard to the interpretation of EU law demonstrated in its decision?














5.


Given the necessary respect for the rights and principles mentioned in the previous question and the obligation to disregard national law that is contrary to EU law, can a court of a Member State, ordered by the court of last instance to initiate new proceedings, deviate in the second proceedings from the instructions given by the court of last instance – without referring a question for a preliminary ruling – if it deems those instructions to be contrary to EU law, and if, after the order to initiate new proceedings, the Court of Justice delivers a decision on the same point of law in a case with similar facts that is contrary to the legal interpretation on which the obligation to initiate new proceedings is based? Or is it only possible to avoid the obligation imposed by the national court of last instance and to implement the subsequent decision of the Court of Justice if the court responsible for initiating new proceedings makes a request for a preliminary ruling in the new proceedings?










6.


In the light of the principle of the primacy of EU law and the consequent obligation to disapply national law that is contrary to EU law, is the answer to the fourth and fifth questions applicable in all cases, irrespective of the subject matter of the dispute, or only in cases concerning the right to deduct VAT?






(1)  Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1).


ELI: http://data.europa.eu/eli/C/2024/5500/oj
ISSN 1977-091X (electronic edition)