PORR Építési Kft. v Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága.
Date: 2019-04-11
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It is important to recall in this connection that, under the reverse charge regime, no VAT payment takes place between the supplier and the recipient of services, the recipient being liable, in respect of the transactions carried out, for the input VAT, while being able, in principle, to deduct that tax so that no amount is payable to the tax authorities (see, to that effect, judgment of 26 April 2017, Farkas, C‑564/15, EU:C:2017:302, paragraph 41 and the case-law cited).
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It must also be pointed out that the right of deduction forms an integral part of the VAT scheme and in principle may not be limited (judgments of 15 July 2010, Pannon Gép Centrum, C‑368/09, EU:C:2010:441, paragraph 37, and of 26 April 2017, Farkas, C‑564/15, EU:C:2017:302, paragraph 42).
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The deduction rules thus established are intended to free the taxable person completely of the burden of the VAT accruing or paid in all its economic activities. The common system of VAT therefore ensures that all economic activities, whatever their purpose or results, provided that they are, in principle, themselves subject to VAT, are taxed in a neutral way (judgments of 22 February 2001, Abbey National, C‑408/98, EU:C:2001:110, paragraph 24, and of 26 April 2017, Farkas, C‑564/15, EU:C:2017:302, paragraph 43).
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It should also be recalled that, as regards the rules governing the exercise of the right to deduct VAT in the reverse charge procedure under Article 199(1) of Directive 2006/112, a taxable person which is liable as the recipient of a service for the VAT relating thereto is not obliged to hold an invoice drawn up in accordance with the formal requirements of that directive in order to be able to exercise its right to deduct, and only has to fulfil the formalities laid down by the Member State concerned in the exercise of the option conferred by Article 178(f) of that directive (see, to that effect, judgment of 26 April 2017, Farkas, C‑564/15, EU:C:2017:302, paragraph 44 and the case-law cited).
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Thus, besides the fact that those invoices did not satisfy the formal requirements provided for under the national legislation which transposed that directive, a substantive requirement of that regime was not met, namely the payment of the VAT to the tax authorities by the taxable person claiming deduction. Such a situation prevented the competent tax authority from investigating the application of the reverse charge regime and led to a risk of a loss of tax revenue for the Member State concerned (see, to that effect, judgment of 26 April 2017, Farkas, C‑564/15, EU:C:2017:302, paragraphs 45 and 46).
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Moreover, the VAT paid by PORR to the suppliers of services which issued the invoices was not due, whereas the right to deduct can be exercised only in respect of taxes actually due, that is to say, the taxes corresponding to a transaction subject to VAT or paid in so far as they were due (see, to that effect, judgment of 26 April 2017, Farkas, C‑564/15, EU:C:2017:302, paragraph 47).
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It must be recalled in this connection that, in the absence of EU rules on applications for the repayment of taxes, the detailed procedural rules designed to ensure the protection of the rights which individuals acquire under EU law are a matter for the domestic legal order of each Member State, under the principle of the procedural autonomy of the Member States; the conditions under which such applications may be made must observe the principles of equivalence and effectiveness, that is to say, they must not be less favourable than those relating to similar claims founded on provisions of domestic law or framed so as to render virtually impossible or excessively difficult the exercise of rights conferred by the EU legal order (see, to that effect, judgment of 26 April 2017, Farkas, C‑564/15, EU:C:2017:302, paragraphs 50 and 52 and the case-law cited).
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In that context, the Court has accepted that a system in which, first, the supplier of services which has paid the VAT to the tax authorities in error may seek to be reimbursed and, secondly, the recipient of those services may bring a civil law action against that supplier for recovery of the sums paid but not due observes the principles of neutrality and effectiveness. Such a system enables that recipient, which bore the tax invoiced in error, to obtain reimbursement of the sums unduly paid (judgments of 15 March 2007, Reemtsma Cigarettenfabriken, C‑35/05, EU:C:2007:167, paragraphs 38 and 39, and of 26 April 2017, Farkas, C‑564/15, EU:C:2017:302, paragraph 51).
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It must however be noted that if, in a situation where the VAT has actually been paid to the Treasury by the supplier of the services, the reimbursement of the VAT by the supplier to the recipient of the services is impossible or excessively difficult, in particular in the case of the insolvency of that supplier of services, the principle of effectiveness may require that the recipient of the services concerned be able to address its application for reimbursement to the tax authorities directly. In such a case, the Member States must provide for the instruments and the detailed procedural rules necessary to enable that recipient of services to recover the unduly invoiced tax in order to respect the principle of effectiveness (see, to that effect, judgment of 26 April 2017, Farkas, C‑564/15, EU:C:2017:302, paragraph 53).