Case C‑254/16

Glencore Agriculture Hungary Kft.

v

Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatóság

(Request for a preliminary ruling
from the Fővárosi Közigazgatási és Munkaügyi Bíróság)

(Reference for a preliminary ruling — Common system of value added tax (VAT) — Directive 2006/112/EC — Article 183 — Principle of fiscal neutrality — Deduction of input tax — Refund of overpaid VAT — Investigation procedure — Fine imposed on the taxable person in the course of such a procedure — Extension of the period within which the refund must be made — Exclusion of payment of default interest)

Summary — Judgment of the Court (Seventh Chamber), 6 July 2017

Harmonisation of fiscal legislation — Common system of value added tax — Deduction of input tax — Refund of overpayment — Compliance with the principle of fiscal neutrality — National legislation providing for a delay in the date for the refund of that overpayment in connection with a tax investigation procedure fining the taxable person for failure to cooperate — Refusal to pay default interest, even if the length of that procedure is excessive — Unlawful

(Council Directive 2006/112, Art. 183)

EU law must be interpreted as precluding national legislation, such as that at issue in the main proceedings, under which, where a tax investigation procedure is initiated by a tax authority and where a taxable person is fined for failure to cooperate, the date of the refund of overpaid value added tax may be delayed until the formal report on that investigation is delivered to the taxable person and the payment of default interest may be refused, even where the duration of the tax investigation procedure is excessive and cannot be attributed entirely to the conduct of the taxable person.

Where the refund of the overpaid VAT to the taxable person is not made within a reasonable period, the principle of fiscal neutrality of the VAT system requires that the financial losses incurred by the taxable person owing to the unavailability of the sums of money at issue should be compensated through the payment of default interest (judgment of 24 October 2013, Rafinăria Steaua Română, C‑431/12, EU:C:2013:686, paragraph 23).

Since the referring court raises, in that regard, the issue of the implications of the conduct of a taxable person whose negligence during a tax investigation procedure was penalised by several fines, it should be noted, as the Hungarian Government claims, that it cannot be accepted that a taxable person who, by refusing to cooperate with a tax authority and by thus impeding the conduct of the investigation procedure, caused the delay in the refund of overpaid VAT, may claim default interest for that delay.

Nevertheless, national legislation or practices according to which the mere fact that a taxable person has been fined due to his negligence during a tax investigation to which he was subject allows the tax authority to extend that investigation over a period not justified by that negligence, without having to pay him default interest, cannot be considered to be compatible with the requirements arising from the principle of fiscal neutrality.

Accordingly, in a situation such as that at issue in the main proceedings, for the purposes of determining whether default interest is due and, where relevant, the point in time from which the right to such interest arises, the proportion of the duration of the tax investigation procedure which can be attributed to the conduct of the taxable person must be ascertained.

(see paras 22, 26-28, 36, operative part)