On 14 February 2019, the Court of Justice of the European Union (ECJ) delivered the judgment between Nestrade, S.A. and Agencia Estatal de la Administración Tributaria (AEAT), Tribunal Económico-Administrativo Central (TEAC) concerning the refusal of value added tax (VAT) refund for non-residents.
FACTS OF THE CASE IN BRIEF
Nestrade, a company based in Switzerland, carried out transactions subject to value added tax in Spain.
On 21 September 2010, Nestrade claimed from the AEAT, under the procedure for the refund of input VAT qualifying as Spanish VAT paid by a trader not resident in the European Union, the input VAT charged and all the other amounts of VAT paid in respect of the supply of goods by its supplier Hero España, S.A. (‘Hero’) in the years 2008, 2009, 2010 and 2011. For all of those financial periods, the AEAT asked Nestrade to provide invoices corresponding to the supplies of goods by Hero (‘the correct invoices’) because the invoices originally produced showed Nestrade’s Netherlands VAT identification number, whereas there should have been indicated the Swiss VAT identification number.
Nestrade did not respond to that request within the time limit prescribed, and on 5 April 2011, AEAT gave a decision refusing to refund claimed in respect of the third and fourth quarters of 2009 on the ground that the claim was not well founded, which was not challenged by Nestrade, and became final on 14 May 2011. On 5 April 2011 Nestrade produced the corrected invoices and cancelled the invoices originally issued by Hero for each of those years, including in relation to the third and fourth quarters of 2009; and again, requested AEAT to refund for the same periods.
On 12 December 2011 the AEAT decided to grant the refund of the amounts of input VAT paid in 2008 and 2010, and in respect of the first and second quarters of 2009; and to refuse to refund in respect of the third and fourth quarters of 2009, based on the decision of 5 April 2011, which had already become final on 14 May 2011. On 8 March 2012 AEAT confirmed the decision of 12 December 2011.
Nestrade lodged an administrative action against the decisions of the AEAT, which was dismissed on the ground of the administrative principle of res judicata by the decision of the Central Tax Tribunal of 22 January 2015. Nestrade then brought judicial proceedings against the decisions of the AEAT, and against the decision of the Central Tax Tribunal before the National High Court (Spain).
QUESTIONS REFERRED TO THE ECJ
- Can the rule [mentioned by the referring court and established by the judgment of 8 May 2013, Petroma Transports and Others (Case C‑271/297, EU:C:2013:297)] be qualified so as to allow a VAT refund sought by an undertaking not established in the European Union, even though the national tax authority has already issued a decision refusing the refund on the grounds that the undertaking had failed to respond to a request for information concerning its tax identification number, in view of the fact that the authority was in possession of that information at the relevant time since it had been provided by the undertaking in response to other requests?
- Does a retroactive application of the rule [established by the judgment of 15 September 2016, Senatex (Case C‑518/14, EU:C:2016:691)] mean that an administrative act refusing the refund of the VAT in question must be revoked, in view of the fact that the act merely upheld a previous final administrative decision refusing the VAT refund, which was adopted by the AEAT using a procedure which was not the procedure laid down by law for that situation and which, furthermore, curtailed the rights of the applicant, depriving it of a legal remedy?
CONCLUSIONS OF THE ECJ
The Court upheld that the provisions of the Thirteenth Council Directive 86/560/EEC of 17 November 1986, on the harmonisation of the laws of the Member States relating to turnover taxes — Arrangements for the refund of value added tax to taxable persons not established in Community territory, must be interpreted as not precluding a Member State from imposing a time limit on the possibility of rectifying incorrect invoices, for example by the rectification of the VAT identification number originally shown on the invoice, for the purposes of the exercise of the right to a VAT refund, provided that the principles of equivalence and effectiveness are respected, which it is for the referring court to verify.
The full details of this case can be viewed on this link: Case C‑562/17
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Franco Falzon C.P.A., LL.M
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