Alakor Gabonatermelő és Forgalmazó Kft. v Nemzeti Adó- és Vámhivatal Észak-alföldi Regionális Adó Főigazgatósága.

• Jurisdiction: European Union
• Celex Number: 62012CJ0191
• ECLI: ECLI:EU:C:2013:315
• Docket Number: C-191/12
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Date: 16 May 2013

JUDGMENT OF THE COURT (Seventh Chamber)

16 May 2013 ( *1 )

‛Non-repayment of the entirety of value added tax unduly paid — National legislation precluding repayment of VAT because it has been passed on to a third party — Compensation in the form of aid covering a fraction of the non-deductible VAT — Unjust enrichment’

In Case C-191/12,

REQUEST for a preliminary ruling under Article 267 TFEU from the Kúria (Hungary), made by decision of 14 March 2012, received at the Court on 23 April 2012, in the proceedings

Alakor Gabonatermelő és Forgalmazó Kft.

v

Nemzeti Adó- és Vámhivatal Észak-alföldi Regionális Adó Főigazgatósága,

THE COURT (Seventh Chamber),

composed of G. Arestis, President of the Chamber, J.-C. Bonichot and A. Arabadjiev (Rapporteur), Judges,

Advocate General: Y. Bot,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

— Alakor Gabonatermelő és Forgalmazó Kft., by A. Nacsa, ügyvéd,

— Hungary, by M.Z. Fehér and G. Koós and by K. Szijjártó, acting as Agents,

— the European Commission, by C. Soulay and A. Sipos, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 This request for a preliminary ruling concerns the interpretation of European Union (‘EU’) law on the recovery of sums unduly paid.

2 The request has been made in proceedings between Alakor Gabonatermelő és Forgalmazó Kft. (‘Alakor’) and Nemzeti Adó- és Vámhivatal Észak-alföldi Regionális Adó Főigazgatósága (Northern Great Plain Regional Directorate-General of Tax of the National Tax and Customs Office ‘Főigazgatósága’), concerning the refusal by the Főigazgatósága to repay the entirety of the value added tax (‘VAT’) the deduction of which has been rejected in infringement of European Union (‘EU’) law.

Legal context

EU law

3 Rule 7 of Commission Regulation (EC) No 448/2004 of 10 March 2004 amending Regulation (EC) No 1685/2000 laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the eligibility of expenditure of operations co-financed by the Structural Funds and withdrawing Regulation (EC) No 1145/2003 (OJ 2004 L 72, p. 66) is worded as follows: ‘Rule No 7: VAT and other taxes and charges 1. VAT does not constitute eligible expenditure except where it is genuinely and definitively borne by the final beneficiary, or individual recipient within the aid schemes pursuant to Article 87 of the Treaty and in the case of aid granted by the bodies designated by the Member States. VAT which is recoverable, by whatever means, may not be considered eligible, even if it is not actually recovered by the final beneficiary or individual recipient. The public or private status of the final beneficiary or the individual recipient is not taken into account for the determination whether VAT constitutes eligible expenditure in application of the provisions of this rule. 2. VAT which is not recoverable by the final beneficiary or individual recipient by virtue of the application of specific national rules shall only constitute eligible expenditure where such rules are in full compliance with the Sixth Council Directive 77/388/EEC [of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1, “the Sixth Directive”)]’.

Hungarian law

4 Article 38(1) of Law LXXIV of 1992 relating to value added tax (az általános forgalmi adóról szóló 1992. évi LXXIV. törvény, Magyar Közlöny 1992/128, XII. 19., ‘the Law relating to VAT’), repealed with effect from 1 January 2006, provided: ‘Taxable persons shall record the amounts of input VAT separately as deductible and non-deductible (positive distinction). A taxable person receiving any subsidies charged to public funds under Article 22(1) and (2) of this Law, not subject to taxation shall, unless otherwise prescribed by the act on the annual budget, (a) be entitled to exercise his right of tax deduction only for the fraction of VAT relating to the amount not subsidised in the purchases of individual goods for which any subsidy is received; …’

5 Article 124/C of Law XCII of 2003 relating to the General Law on Taxation (az adózás rendjéről szóló 2003. évi XCII. törvény, Magyar Közlöny 2003/131, XI. 14., ‘the General Law on Taxation’), is worded as follows: ‘(1) When the Constitutional Court, the Kúria or the Court of Justice of the European Union state, with retroactive effect, that a rule of law which lays down a tax obligation is contrary to the Basic Law or a binding measure of the European Union, or, if it concerns a municipal regulation, is contrary to any other rule of law, and that that judicial decision creates a right to repayment for the taxpayer, the first instance tax authority shall, on application by the taxpayer, make a repayment – according to the methods specified in the decision concerned – in accordance with this article. (2) The taxpayer may make his application in writing to the tax authority within 180 days following publication or notification of the decision of the Constitutional Court, of the Kúria or of the Court of Justice …; no application for leave to appeal shall be accepted on expiry of the deadline. The tax authority shall reject the application in the event of the right relating to the assessment of the tax being time-barred as at the date of publication or as at notification of the decision. … (3) The application must mention, in addition to the information required to identify the taxpayer with the tax authority, the tax paid on the date of making the application and the repayment of which is sought and the instrument permitting enforcement on the basis of which it was paid; it must also refer to the decision of the Constitutional Court, of the Kúria or of the Court of Justice …; and must include a declaration that (a) the taxpayer did not, as at the date of making the request, pass on to another person the tax for which he seeks repayment, …’

6 Article 124/D of the General Law on Taxation provides: ‘(1) In so far as the present article does not provide otherwise, the provisions of Article 124/C apply to applications for repayment based on the right to deduct VAT. (2) The taxpayer may claim the right referred to in paragraph 1 above by means of a tax regularisation declaration … (3) If the return, as amended by the regularisation declaration, shows that the taxpayer has a right to repayment …, the tax authority shall apply to the amount to be repaid an interest rate which is equivalent to the central bank base rate … (5) There is also passing on of tax for the purposes of Article 124/C(3)(a), where the taxpayer is granted aid in a manner which – taking account of the prohibition on deducting VAT – also finances VAT, and where the taxpayer is granted additional aid by the State budget to compensate for non-deductible VAT. …’

The dispute in the main proceedings and the questions referred for a preliminary ruling

7 During 2005, Alakor concluded a subsidy contract with the Földművelésügyi és Vidékfejlesztési Minisztérium (Ministry of Agriculture and Rural Development, ‘the Funds provider’), aimed at enabling it to finance a project under the operational programme for agriculture and rural development relating to the second half of 2005 (‘the aid’).

8 As a consequence of Article 38(1)(a) of the Law on VAT, in its version in force at the material time, it was not possible to deduct, proportionally to the amount of the aid, the part of input VAT paid on costs relating to the subsidised project.

9 By contrast, under Ministry of Finance guidelines, the ‘eligible...