European Court of Justice Issues Preliminary Ruling on Hungarian Input VAT Deduction Rules

The European Court of Justice (ECJ) April 10 issued a preliminary ruling for Case No. C- 532/23, on Hungarian input VAT deduction rules. The taxpayer produced equipment in Hungary and was unable to deduct input tax because only purchases paid in full created the right to a deduction. Following a subsequent legislative amendment in accordance with a court ruling to allow deductions in these instances, the tax agency declined to pay interest on the taxpayer’s refunds. Upon request for a preliminary ruling, the ECJ held that: 1) under the common system of VAT, a taxpayer can claim a VAT refund, ...