Hungary - VAT refund rules incompatible with the EU VAT Directive
ECJ: Advocate General finds Hungarian VAT refund rules incompatible with the EU VAT Directive.
On 26 May 2011, Advocate General (AG) Yves Bot of the Court of Justice of the European Union (ECJ) delivered his opinion in the case of European Commission v. Republic of Hungary (Case C-274/10). The European Commission referred the case to the ECJ on 1 June 2010. In this case, the AG concluded that Hungary has failed to fulfil its obligations under the EU VAT Directive by requiring taxable persons whose tax return for a given tax period records an "excess" within the meaning of Art. 183 of that Directive to carry forward that excess or a part of it to the following tax period when the taxable person has not paid the supplier the full amount for the purchase in question, and by creating a situation, as a result of that requirement, where certain taxable persons whose tax returns regularly record an "excess" may be required more than once to carry forward the excess to the following tax period.
A more substantial report containing details of the AG's reasoning will be published subsequently.
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