European Court of Justice Issues Preliminary Ruling on Hungarian VAT Rules

The European Court of Justice (ECJ) Oct. 13 issued a preliminary ruling for Case No. C-397/21, clarifying Hungarian VAT rules. A Hungarian company received construction services in Italy, and paid invoices to the supplier of the services that included VAT payable in Hungary. The Hungarian tax authority later found that VAT shouldn’t have been paid in Hungary, but determined it wasn’t responsible for payment of the refund. On appeal, the ECJ ruled that under the EU common VAT system and principles of effectiveness and neutrality: 1) countries’ domestic legal systems must provide for the refund of improperly paid VAT, where ...