The Court of the Union struck a hole in our tax procedure rules

By: Trademagazin Date: 2024. 05. 16. 11:32

According to the decision made by the Court of Justice of the European Union on May 16, 2024 (C-746/22), the Hungarian rule that does not allow foreign taxpayers in VAT refund procedures to submit their documents even to the second instance (appeal ) can also be submitted in the procedure. However, this can not only affect the VAT refund of foreigners, but can also be used in any VAT case where the tax authority refused to evaluate the facts and evidence submitted during the appeal. The most important lessons learned from the case were collected by the experts of the Jalsovszky Law Firm.

Foreign businesses often encounter the fact that they receive an invoice containing Hungarian VAT for services or products purchased in Hungary. Unlike the majority of domestic businesses, they cannot account for or reclaim the amount of these VATs in their own VAT returns, because they have neither a Hungarian establishment nor a Hungarian tax number.

They therefore have to claim the VAT back in a special procedure every year. It is not necessary to attach all invoices and supporting documents to the application, it is sufficient to indicate the serial numbers of the relevant invoices. After submitting the application, the Hungarian tax authorities therefore often ask foreign companies to submit additional documents within one month.