Opinion of Advocate General Hogan delivered on 11 September 2019.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• ECLI: ECLI:EU:C:2019:708
• Date: 11 September 2019

Provisional text

OPINION OF ADVOCATE GENERAL

HOGAN

delivered on 11 September 2019 (1)

Joined Cases C‑13/18 and C‑126/18

Sole-Mizo Zrt.

v

Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága

(Request for a preliminary ruling from the Szegedi Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court of Szeged, Hungary))

and

Dalmandi Mezőgazdasági Zrt.

v

Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága

(Request for a preliminary ruling from the Szekszárdi Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court of Szekszárd, Hungary))

(Reference for a preliminary ruling — Common system of value added tax (VAT) — Directive 2006/112/EC — Failure of a Member State to fulfil obligations — Liability of the Member States — Right to full compensation or right to an adequate compensation — Calculation of interest due to compensate for the damage caused — Principles of effectivity and equivalence — Scope of application)

1. The present two requests for a preliminary ruling, which were lodged by the Szegedi Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court of Szeged, Hungary) and by the Szekszárdi Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court of Szekszárd, Hungary) concern the scope of the right to be compensated for a failure of a Member State to fulfil its obligations under EU law.

2. The requests have been made in proceedings between Sole-Mizo Zrt. (C‑13/18), Dalmandi Mezőgazdasági Zrt. (C‑126/18) and the Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága (Appeals Division of the National Tax and Customs Authority, Hungary). They concern the legality of a national practice established by the Hungarian Government to compensate VAT payers for the application of a condition laid down by a national law which was subsequently declared by this Court to be contrary to EU law. As I propose to explain, this national practice seems in some respects to go beyond what is required by EU Law, whereas in other respects, it does not fulfil those requirements.

3. Before considering the questions asked, it is, however, first necessary to set out the relevant provisions of EU law and national law.

I. EU law

A. Directive 2006/112

4. Article 183 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’) provides:

‘Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period.

However, Member States may refuse to refund or carry forward if the amount of the excess is insignificant.’

B. National law

1. Rules governing the VAT recovery procedure

5. The általános forgalmi adóról szóló 2007. évi CXXVII. törvény jogharmonizációs célú módosításáról és az adó-visszaigénylés különös eljárási szabályairól szóló 2011. évi CXXIII. törvény (Law CXXIII of 2011 amending with a view to harmonisation Law CXXVII of 2007 on value added tax and laying down rules on the special procedure for claims for the refund of tax; ‘the amending law’) contains the following provisions:

‘Paragraph 1

(1) Amounts in respect of which the taxable person was not able to claim, in the last VAT return that he was required to submit before the entry into force of this Law (‘return’), his right to recovery pursuant to Paragraph 186(2) to (4) of the általános forgalmi adóról szóló 2007. évi CXXVII. törvény [(Law CXXVII of 2007 on value added tax (‘the VAT Act’)], repealed by this Law — only for the amount that the taxable person inscribed as tax on unpaid acquisitions — may be the subject of a request for recovery submitted to the tax authorities by the taxable person until 20 October 2011, using the form provided for that purpose; irrespective of this period, the taxable person may, in the return corresponding to the scheme to which he is subject, count the above amounts as an item reducing the amount of tax for which he is liable, or exercise his right to a refund in his return. This request is considered to be a declaration for the purposes of the provisions of the adózás rendjéről szóló 2003. évi XCII. törvény [(Law XCII of 2003, enacting the Code of Fiscal Procedure)]. The time limit for making this request cannot be extended.

(2) In his application submitted by 20 October 2011, the taxable person may only request the tax authorities to carry out a new audit of a return for a period prior to the entry into force of this Law for the purpose of reviewing the legal consequences previously established only when he has been charged, by a decision which has become final following the previous audit, a tax fine or default interest on the basis of Paragraph 186(2) to (4) of [the VAT Act], repealed by this Act, or Paragraph 48(7) of the általános forgalmi adóról szóló 1992. évi LXXIV. törvény [(Law LXXIV of 1992 on value added tax; ‘the former VAT Act’)]. The taxable person may make such a request even when he does not make use of the provisions of subparagraph 1 above. The time limit for making this request is a limitation period from which the taxable person cannot be relieved.

…

Paragraph 3

Paragraph 186(2) to (4) of [the VAT Act], repealed by the present Law, and Paragraph 48(7) of [the former VAT Act] are not applicable to cases pending on the date of entry into force of this Law or to those brought after that date.’

2. The Hungarian Code of Fiscal Procedure

6. Paragraph 37(4) and (6) of the adózás rendjéről szóló 2003. évi XCII. törvény (Law XCII of 2003, enacting the Code of Fiscal Procedure; ‘the Code of Fiscal Procedure’), provided in its initial version, which is the one quoted by the Hungarian government in its observations and the only presented to the Court,(2) as follows :

‘(4) The due date for the payment of a budget subsidy due to the taxable person shall be governed by the Annexes to this Law or a specific law. The budget grant or VAT whose refund is claimed must be paid within 30 days of receipt of the request (declaration), but not before the due date, this period being extended to 45 days where the amount of recoverable VAT exceeds 500 000 forint [(HUF)]. …

…

(6) Where the tax administration makes a late payment, it shall pay interest at a rate equivalent to that of a late payment penalty for each day of delay. …’

7. Paragraph 124/C of the Code of Fiscal Procedure, in the version quoted by the referring courts(3), provides:

‘(1) Where the Alkotmánybíróság [(Constitutional Court, Hungary)], the Kúria [(Supreme Court, Hungary)] or the Court of Justice of the European Union find, with retroactive effect, that a rule of law prescribing a tax obligation is contrary to the Fundamental Law or to a mandatory act of the European Union or, in the case of a municipal regulation, to any other rule of law, and that this judicial decision gives rise to a right of reimbursement for the taxable person under the provisions of this Paragraph, the initial tax authority shall proceed with the reimbursement at the taxable person’s request, in accordance with the procedures specified in the decision concerned.

(2) The taxable person may submit his request in writing to the tax authority within 180 days of the publication or notification of the decision of the Alkotmánybíróság [(Constitutional Court)], the Kúria [(Supreme Court)] or the Court of Justice of the European Union; no request for relief from the foreclosure shall be allowed at the end of the period. The tax authority shall reject the request in the event that, on the date of publication or notification of the decision, the right to claim for compensation has expired.

…

(6) If the taxable person’s right to a refund is well founded, the tax authority shall pay — at the time of refund — interest on the tax to be refunded, at a rate equal to the central bank’s base rate and calculated from the date of payment of the tax until the day on which the decision granting the refund became final. The refund is due on the date on which the decision granting it became final and must be made within 30 days of the date on which it became due. The provisions relating to the payment of budget subsidies shall apply mutatis mutandis to the reimbursement governed by this paragraph, with the exception of Paragraph 37(6).’

8. Paragraph 124/D, subparagraphs 1 to 3, of the Code of Fiscal Procedure, in the version quoted by the referring courts, reads as follows:

‘(1) Unless otherwise provided for in this Paragraph, the provisions of Paragraph 124/C shall apply to refund applications based on the right to deduct VAT.

(2) The taxable person may exercise the right referred to in subparagraph 1 above by means of a declaration of regularisation — submitted within 180 days of the publication or notification of the decision of the Alkotmánybíróság [(Constitutional Court)] or the Court of Justice of the European Union — of the declaration or declarations corresponding to the tax year or tax years in which the right of deduction concerned was created. No request for a statement of foreclosure will be accepted at the end of the time limit.

(3) If the statement, as rectified in the regularisation declaration, shows that the taxable person is entitled to a refund either because of the reduction in the tax he has to pay or because of the increase in the amount recoverable — also taking into account the conditions for refunding the tax to be recorded as negative, provided for by the VAT law in force on the date on which the right to deduct arises — the tax authority shall apply to the amount to be refunded an interest rate equivalent to the central bank’s base rate, calculated for the period between the date fixed for payment in the declaration or declarations concerned by the regularisation declaration, or the due date — or the date of payment of the tax if this is later — and the date on which the...