APEH Központi Hivatal Hatósági Főosztály Dél-dunántúli Kihelyezett Hatósági Osztály

(Reference for a preliminary ruling from the Baranya Megyei Bíróság)

(Sixth VAT Directive – Directive 2006/112/EC – Right to deduct input tax – National legislation penalising an error in the invoice by loss of the right to deduct)

Summary of the Judgment

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Obligations of the taxable person – Holding of an invoice containing certain information

(Council Directive 2006/112, Arts 167, 178(a), 220, para. 1, and 226)

Articles 167, 178(a), 220(1) and 226 of Council Directive 2006/112 on the common system of value added tax must be interpreted as precluding national legislation or practice whereby the national authorities deny to a taxable person the right to deduct from the VAT which he is liable to pay the VAT due or paid in respect of services supplied to him on the grounds that the initial invoice, in the possession of the taxable person when the deduction is made, contained an incorrect completion date for the supply of services and the numbering of the subsequently corrected invoice and the credit note cancelling the initial invoice were not sequential, if the material conditions governing deduction are satisfied and, before the tax authority concerned has made a decision, the taxable person has submitted to the tax authority a corrected invoice stating the correct date on which that supply of services was completed, even though the numbering of that invoice and the credit note cancelling the initial invoice are not sequential.

Only the details listed in Article 226 of Directive 2006/112 must obligatorily appear, for VAT purposes, on invoices issued pursuant to Article 220 of that directive. It follows that it is not open to Member States to make the exercise of the right to deduct VAT dependent on compliance with conditions relating to the content of invoices which are not expressly laid down by the provisions of that directive.

(see paras 40-41, 45, operative part)

15 July 2010 (*)

(Sixth VAT Directive – Directive 2006/112 – Right to deduct input tax – National legislation penalising an error in the invoice by loss of the right to deduct)

In Case C‑368/09,

REFERENCE for a preliminary ruling under Article 234 EC from the Baranya Megyei Bíróság (Hungary), made by decision of 31 August 2009, received at the Court on 14 September 2009, in the proceedings

APEH Központi Hivatal Hatósági Főosztály Dél-dunántúli Kihelyezett Hatósági Osztály,

THE COURT (Third Chamber),

Composed of K. Lenaerts (Rapporteur), President of the Chamber, R. Silva de Lapuerta, G. Arestis, J. Malenovský and T. von Danwitz, Judges,

Advocate General: N. Jääskinen,

Registrar: R. Grass,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– the Hungarian Government, by J. Fazekas, M. Fehér and K. Szíjjártó, acting as Agents,

– the European Commission, by D. Triantafyllou and B.D. Simon, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

This reference for a preliminary ruling concerns the interpretation of Articles 17(1), 18(1)(a) and 22(3)(a) and (b) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1, ‘the Sixth Directive’), as amended by Council Directive 2001/115/EC of 20 December 2001 (OJ 2002 L 15, p. 24).

The reference was made in proceedings brought by Pannon Gép Centrum Kft (‘the applicant’) against APEH Központi Hivatal Hatósági Főosztály Dél-dunántúli Kihelyezett Hatósági Osztály (‘APEH’) in relation to the latter’s denial of the applicant’s right to deduct, from the value added tax (‘VAT’) which the applicant was liable to pay, the VAT relating to services which had been supplied to the applicant.

Legal context

European Union legislation

Directive 2011/92

Recitals 7 to 9 of Directive 2011/92 state:

‘(7) Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out. …

(8) Projects belonging to certain types have significant effects on the environment and those projects should, as a rule, be subject to a systematic assessment.

ECLI:EU:C:2025:140

(9) Projects of other types may not have significant effects on the environment in every case and those projects should be assessed where the Member States consider that they are likely to have significant effects on the environment.’

Article 2(1) of that directive provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

Under Article 3(1) of that directive:

‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case, the direct and indirect significant effects of a project on the following factors:

…

(b) biodiversity, with particular attention to species and habitats protected under [Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (“Directive 92/43”)] and Directive 2009/147/EC [of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7)];

…’

Article 4 of Directive 2011/92 provides:

‘1. Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

(a) a case-by-case examination;

(b) thresholds or criteria set by the Member State.

Member States may decide to apply both procedures referred to in points (a) and (b).

Where a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account. Member States may set thresholds or criteria to determine when projects need not undergo either the determination under paragraphs 4 and 5 or an environmental impact assessment, and/or thresholds or criteria to determine when projects shall in any case be made subject to an environmental impact assessment without undergoing a determination set out under paragraphs 4 and 5.

Where Member States decide to require a determination for projects listed in Annex II, the developer shall provide information on the characteristics of the project and its likely significant effects on the environment. The detailed list of information to be provided is specified in Annex IIA. The developer shall take into account, where relevant, the available results of other relevant assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The developer may also provide a description of any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

The competent authority shall make its determination, on the basis of the information provided by the developer in accordance with paragraph 4 taking into account, where relevant, the results of preliminary verifications or assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The determination shall made available to the public and:

where it is decided that an environmental impact assessment is required, state the main reasons for requiring such assessment with reference to the relevant criteria listed in Annex III; or

where it is decided that an environmental impact assessment is not required, state the main reasons for not requiring such assessment with reference to the relevant criteria listed in Annex III, and, where proposed by the developer, state any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

Member States shall ensure that the competent authority makes its determination as soon as possible and within a period of time not exceeding 90 days from the date on which the developer has submitted all the information required pursuant to paragraph 4. In exceptional cases, for instance relating to the nature, complexity, location or size of the project, the competent authority may extend that deadline to make its determination; in that event, the competent authority shall inform the developer in writing of the reasons justifying the extension and of the date when its determination is expected.’

Annex II.A of that directive contains the list of ‘information to be provided by the developer on the projects listed in Annex II’. That list reads as follows:

A description of the project, including in particular:

a description of the physical characteristics of the whole project and, where relevant, of demolition works;

a description of the location of the project, with particular regard to the environmental sensitivity of geographical areas likely to be affected.

A description of the aspects of the environment likely to be significantly affected by the project.

A description of any likely significant effects, to the extent of the information available on such effects, of the project on the environment resulting from:

the expected residues and emissions and the production of waste, where relevant;

the use of natural resources, in particular soil, land, water and biodiversity.

JUDGMENT OF 6. 3. 2025 – CASE C-41/24 WALTHAM ABBEY RESIDENTS ASSOCIATION

The criteria of Annex III shall be taken into account, where relevant, when compiling the information in accordance with points 1 to 3.’

Annex III to that directive sets out the ‘criteria to determine whether the projects listed in Annex II should be subject to an environmental impact assessment’.

Directive 2014/52

Recitals 11 and 29 of Directive 2014/52 state:

The measures taken to avoid, prevent, reduce and, if possible, offset significant adverse effects on the environment, in particular on species and habitats protected under [Directive 92/43] and Directive 2009/147 …, should contribute to avoiding any deterioration in the quality of the environment and any net loss of biodiversity, in accordance with the [European] Union’s commitments in the context of the [United Nations Convention on Biological Diversity, signed in Rio de Janeiro on 5 June 1992,] and the objectives and actions of the Union Biodiversity Strategy up to 2020 laid down in the [Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions] of 3 May 2011 entitled ‘Our life insurance, our natural capital: an EU biodiversity strategy to 2020’ [(COM(2011) 244 final)]

…

When determining whether significant effects on the environment are likely to be caused by a project, the competent authorities should identify the most relevant criteria to be considered and should take into account information that could be available following other assessments required by Union legislation in order to apply the screening procedure effectively and transparently. In this regard, it is appropriate to specify the content of the screening determination, in particular where no environmental impact assessment is required. Moreover, taking into account unsolicited comments that might have been received from other sources, such as members of the public or public authorities, even though no formal consultation is required at the screening stage, constitutes good administrative practice.’

Directive 92/43

Article 6(3) of Directive 92/43 provides:

‘Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.’

Article 12(1) of that directive provides:

‘Member States shall take the requisite measures to establish a system of strict protection for the animal species listed in Annex IV(a) in their natural range, prohibiting:

all forms of deliberate capture or killing of specimens of these species in the wild;

deliberate disturbance of these species, particularly during the period of breeding, rearing, hibernation and migration;

deliberate destruction or taking of eggs from the wild;

deterioration or destruction of breeding sites or resting places.’

Point (a) of Annex IV to that directive mentions ‘all species’ of bats belonging to the suborder of ‘microchiroptera’.

Irish law

addressed to the taxable person.’

12Article 1/E(1) of the order of the Ministry of Finance No 24 of 1995 (XI. 22.), on the tax identification of invoices, simplified invoices and receipts, and the use of cash registers and taximeters to ensure the issue of receipts (24/1995. (XI. 22.) PM rendelet a számla, egyszerűsített számla és nyugta adóigazgatási azonosításáról, valamint a nyugta adását biztosító pénztárgép és taxaméter alkalmazásáról), provides:

‘An invoice printed on paper by means of IT tools may be used for tax identification solely when it is part of a rigorous accounting system operated in such a way that

the computer programme which is used to issue the invoices permanently guarantees sequential numbering, without omissions or repetitions …’.

13Article 165(2) of Law No C of 2000 on accounting (Számvitelről szóló 2000. évi C. törvény) provides that data may be recorded in accounting ledgers only if that data is supported by properly issued documents. Under Article 166(2) of that law, information contained in accounting records must, both formally and substantively, be authentic, reliable and correct.

The dispute in the main proceedings and the questions referred for a preliminary ruling

14On 2 May 2007 the applicant entered into a contract with Betonút Szolgáltató és Építő Zrt (‘Betonút’), whereby the applicant gave an undertaking to Betonút that it would carry out repairs to a bridge. The applicant entrusted the carrying out of that work to a sub-contractor, J és B Pannon-Bau Kft.

15On 20 November 2007 Betonút issued to the applicant a certificate of completion of that work and, on the basis of that certificate, the applicant issued to Betonút the invoices relating to the execution of that work stating the date of their completion to be 20 November 2007. At the same time the sub-contractor presented to the applicant two invoices relating to the work carried out by it, stating the completion date of that work to be 14 December 2007.

16On 3 October 2007 the applicant entered into a contract with Gebrüder Haider Építőipari Kft (‘Haider’), whereby the applicant gave an undertaking to Haider that it would carry out storm sewer construction work. For the performance of that contract, the applicant entrusted that work to the same sub-contractor, namely J és B Pannon-Bau Kft (‘the sub-contractor’).

17Haider issued a certificate of completion of that work stating the date of completion to be 11 December 2007, and the final invoice which was issued by the applicant to Haider also specified that date as the date of completion of the work. The sub-contractor, for its part, issued an invoice to the applicant stating 18 December 2007 to be the date of completion of that work.

18In its tax return for the fourth quarter of 2007, the applicant recorded the three abovementioned invoices from the sub-contractor and exercised its right to deduct VAT.

19The tax authority inspected that tax return and found that the completion dates contained in the work completion certificates issued by Betonút and Haider and in the invoices issued by the applicant to those companies preceded the dates appearing in the invoices issued by the sub-contractor and used by the applicant to carry out a deduction of VAT.

20The applicant and the sub-contractor informed the tax authority that the completion dates stated in the invoices issued by the latter were incorrect.

21On 29 September 2008 the sub-contractor cancelled the three incorrect invoices by means of credit notes numbered 2007/0000000124, 2007/0000000125 and 2007/0000000126 and replaced them with new invoices numbered JESB20080000016, JESB20080000017 and JESB20080000018. The work completion date stated in the new invoices was the same as that appearing in the invoices issued by the applicant.

22By a decision of 21 January 2009, the first level tax authority ordered the applicant to pay, first, the VAT relating to the services supplied by the sub‑contractor, which the applicant had deducted from the tax which it was liable to pay in the fourth quarter of 2007 and, secondly, both a fine and a penalty for late payment. According to that tax authority, the applicant could not use the invoices initially issued by the sub-contractor for the purposes of deduction of VAT, since those invoices did not contain the correct date of completion of the work by the sub‑contractor. Nor could the new corrected invoices be used as the basis for deduction of VAT, because the numbering had not been sequential. The tax authority found in that regard that the credit notes and the corrected invoices issued on the same day used two distinct numbering systems since the numbers of the credit notes began with the figures ‘2007’ whereas the numbers of the corrected invoices began with ‘JESB2008’.

23By a decision of 29 April 2009 the APEH upheld the decision of the first level tax authority of 21 January 2009.

24The applicant brought an action before the Baranya Megyei Bíróság (Baranya county court).

25In the order for reference, the Baranya Megyei Bíróság considers that, under the national legislation at issue, as interpreted by the Legfelsőbb Bíróság (Hungarian Supreme Court) and applied by the tax authority, the taxable person can maintain his right to deduct only on the basis of an invoice which is both formally and substantively authentic. Accordingly, the exercise of the right to deduct is to be challenged if the invoice contains a formal defect of any kind. In the present case, because of the errors in the work completion dates stated in the sub-contractor’s invoices, the tax authority challenged the right to deduct exercised on the basis of those invoices, notwithstanding that they were substantively authentic. The tax authorities have never disputed that the commercial transactions specified in those invoices were carried out for the consideration stated in them.

In those circumstances the Baranya Megyei Bíróság decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

(1)Do the provisions of national law contained in Article 13(1)(16) of the Law on VAT in force at the material time when the disputed invoices were issued and in Article 1/E(1) of Order 24/1995 of the Hungarian Ministry of Finance, specifically the provision in Article 13(1)(16)(f) of the Law on VAT, comply with the features of invoices, and the concept of an invoice, laid down in Article 2[(2)] of Council Directive 2001/115?

In the event that the first question is answered in the affirmative:

(2)Is a Member State’s practice which consists of penalising formal defects in invoices intended to be used as a basis for the right to deduct by denying that right contrary to Article 17(1), Article 18(1)(a) and Article 22(3)(a) and (b) of the Sixth Directive?

(3)In order to be able to exercise the right to deduct, is it sufficient to fulfil the obligations laid down in Article 22(3)(b) of the Sixth Directive, or is it possible to exercise the right to deduct and accept the invoice as an authentic document only if, at the same time, all the details required under Directive 2001/115 are provided and all the obligations laid down in Directive 2001/115 are fulfilled?

The questions referred for a preliminary ruling

Preliminary remarks

27It is clear that the referring court is asking the Court to rule upon the compatibility of provisions of national law or a national practice with European Union law.

28It must be recalled in this respect that, although it is not the task of the Court, in preliminary ruling proceedings, to rule upon the compatibility of provisions of national law or a national practice with the legal rules of the European Union, the Court has repeatedly held that it has jurisdiction to give the national court full guidance on the interpretation of European Union law in order to enable it to determine the issue of compatibility for the purposes of the case before it (see Case C‑118/08 Transportes Urbanos y Servicios Generales [2010] ECR I‑0000, paragraph 23, and case-law there cited).

29It is therefore appropriate for the Court, in the present case, to restrict its analysis to the provisions of European Union law by providing an interpretation of them which will be of use to the national court, which has the task of determining the compatibility of the provisions of national law or the national practice with European Union law, for the purposes of deciding the dispute before it (see, by analogy, Case C‑380/05 Centro Europa 7 [2008] ECR I‑349, paragraph 51).

30That being the case, it is clear that the subject of the reference from the national court, which mentions Articles 17(1), 18(1)(a) and 22(3)(a) and (b) of the Sixth Directive, is the interpretation of those provisions.

31However, in accordance with Articles 411 and 413 of Directive 2006/112, that directive repealed and replaced the Sixth Directive from 1 January 2007.

32Since all the facts of the main proceedings post-date 1 January 2007, only the interpretation of the provisions of Directive 2006/112 is relevant to the main proceedings.

33The fact that the national court has, formally speaking, worded the questions referred for a preliminary ruling with reference solely to provisions of the Sixth Directive does not preclude the Court from providing to the national court all the elements of interpretation which may be of assistance in adjudicating on the case pending before it, whether or not that court has referred to them in the wording of its questions (see, to that effect, Case C‑115/08 ČEZ [2009] ECR I‑0000, paragraph 81, and Case C‑341/08 Petersen [2010] ECR I‑0000, paragraph 48).

34In that regard, it must be observed that, as is clear from recital (3) of Directive 2006/112, that directive is a recasting of the existing legislation, and in particular the Sixth Directive, which does not, in principle, involve any material changes.

35In those circumstances, it must be held that the questions referred for a preliminary ruling concern the interpretation of Articles 167, 178(a), 220(1) and 226 of Directive 2006/112, which correspond to the provisions of the Sixth Directive mentioned in the order for reference.

Substance

36By the questions referred, which can be considered together, the national court essentially seeks to ascertain whether Articles 167, 178(a), 220(1) and 226 of Directive 2006/112 preclude national legislation such as that at issue in the main proceedings, or a practice based on such legislation, which denies the right to deduct VAT where the invoice relating to goods or services supplied to the taxable person initially contained an error and the subsequent correction of that error does not comply with all the conditions set by the applicable national rules.

37In that regard, it must be recalled that the right to deduct provided for in Article 167 et seq. of Directive 2006/112 is an integral part of the VAT scheme and in principle may not be limited. The right to deduct is exercisable immediately in respect of all the taxes charged on transactions relating to inputs (see, inter alia, Case C‑62/93 BP Soupergaz [1995] ECR I‑1883, paragraph 18; Joined Cases C‑110/98 to C‑147/98 Gabalfrisa and Others [2000] ECR I‑1577, paragraph 43, and Joined Cases C‑439/04 and C‑440/04 Kittel and Recolta Recycling [2006] ECR I‑6161, paragraph 47).

38It is clear from the order for reference that, in the present case, the material conditions laid down in Article 168(a) of Directive 2006/112 governing whether the applicant is entitled to exercise the right to deduct the VAT relating to the services supplied to him by the sub‑contractor are satisfied. Those services were in fact used for the purposes of taxed transactions, carried out by the taxable person in the Member State concerned.

39However, under Article 178(a) of Directive 2006/112, the exercise of the right of deduction referred to in Article 168(a) of that directive is subject to the condition that an invoice is held. In accordance with Article 220(1) of Directive 2006/112, an invoice must thus be issued for every supply of goods or services which a taxable person makes on behalf of another taxable person.

40Article 226 of Directive 2006/112 states that, without prejudice to the particular provisions of that directive, only the details listed in that article must obligatorily appear, for VAT purposes, on invoices issued pursuant to Article 220 of that directive.

It follows that it is not open to Member States to make the exercise of the right to deduct VAT dependent on compliance with conditions relating to the content of invoices which are not expressly laid down by the provisions of Directive 2006/112. It may be added that that interpretation is supported by Article 273 of that directive which provides that Member States may impose obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, but that option may not be relied upon in order to impose additional invoicing obligations over and above those laid down by, inter alia, Article 226 of that directive.

42In the context of the main proceedings, the right to deduct VAT relating to the services supplied by the sub-contractor was denied to the applicant for two reasons. First, the initial invoices issued by the sub-contractor specified completion dates for the supplies of services which were incorrect. Secondly, the view taken of the corrected invoices, the correctness of the completion dates specified in them not being disputed, was that the numbering provided was not sequential in that the credit notes and the corrected invoices issued on the same day used different numbering systems.

43Admittedly, as observed by the Hungarian Government, an invoice must, in accordance with Article 226(7) of Directive 2006/112, obligatorily specify the correct date on which the supply of services was completed. However, it is clear from the documents submitted to the Court that, when the first level tax authority denied the applicant the right to deduct the VAT relating to the services supplied to it by the sub‑contractor, the tax authority was already in possession of invoices corrected by the sub‑contractor, specifying the correct dates of completion. Directive 2006/112 does not prohibit the correction of incorrect invoices.

44In the light of the findings in paragraphs 38 and 41 of this judgment, if the corrected invoices contained all the details required by Directive 2006/112, in particular in Article 226 of that directive, which it is for the national court to determine, it should be held that, in circumstances such as those in the main proceedings, all the material and formal conditions governing whether the applicant is entitled to deduct the VAT relating to the supply of services by the sub-contractor were satisfied. In that regard, it should be noted that Article 226 of Directive 2006/112 imposes no requirement that corrected invoices and credit notes cancelling incorrect invoices must fall within the same series.

Costs

46Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Third Chamber) hereby rules:

Articles 167, 178(a), 220(1) and 226 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as precluding national legislation or practice whereby the national authorities deny to a taxable person the right to deduct from the VAT which he is liable to pay the VAT due or paid in respect of services supplied to him on the grounds that the initial invoice, in the possession of the taxable person when the deduction is made, contained an incorrect completion date for the supply of services and the numbering of the subsequently corrected invoice and the credit note cancelling the initial invoice were not sequential, if the material conditions governing deduction are satisfied and, before the tax authority concerned has made a decision, the taxable person has submitted to the tax authority a corrected invoice stating the correct date on which that supply of services was completed, even though the numbering of that invoice and the credit note cancelling the initial invoice are not sequential.

[Signatures]

*

Language of the case: Hungarian.