Hungary - restriction or prohibition of the right to deduct input VAT
Preliminary ruling requested from the ECJ on the restriction or prohibition of the right to deduct input VAT in Hungary.
On 23 March 2011, the Jász-Nagykun-Szolnok County Courtrequested a preliminary ruling from the Court of Justice of the European Union (ECJ) in Péter Dávid v. Nemzeti Adó- és Vámhivatal Észak-alföldi Regionális Adó Főigazgatósága (Case C-142/11).
The referring Court wishes to know whether:
"The provisions relating to VAT deductions in the Sixth VAT Directive, and, as regards 2007, in the EU VAT Directive are to be interpreted as meaning that the right of deduction of a taxable person may be restricted or prohibited by the tax authority, on the basis of strict liability, if the invoice issuer cannot guarantee that the involvement of further subcontractors complied with the rules?
Where the tax authority does not dispute that the economic activity detailed in the invoice actually took place, nor that the form of the invoice complies with the legal provisions, the authority may lawfully prohibit a VAT refund if the identity of the other subcontractors used by the invoice issuer cannot be determined, or invoices have not been issued in accordance with the rules by the latter?
A tax authority which prohibits the exercise of the right of deduction in accordance with paragraph 2 is obliged to ensure during its procedures that the taxable person with the right of deduction was aware of unlawful conduct, possibly engaged in for the purpose of tax avoidance, of the companies behind the subcontracting chain, or even colluded in such conduct?"
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