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ECJ C-611/19 (Crewprint) – Questions – Denial of input VAT recovery without full investigation, is a business free to choose form with lowest VAT burden?

Unofficial translation/summary:

  • The applicant, a company providing printing and printing services, had accepted orders for the production of printed matter. However, following an investigation, the tax authority concluded that the printing work was mainly carried out by Crew Kft itself.
  • Crew Kft. had therefore received and deducted invoices for printing services unlawfully and subsequently reduced the tax due using false invoices from subcontractors in such a way that the taxpayers who were at the end of the consciously constructed billing chain did not pay VAT.
  • According to the tax authority, these facts and the tax evasion are by Crew Kft. was necessarily and objectively known to the applicant, since the director of the two companies was the same person and the two companies had the same seat, the same place of business and the same accountant.
  • The applicant has therefore seriously infringed the principle of good faith exercise enshrined in the tax law. In her claim, the applicant claims that the legal requirements were met and was therefore entitled to deduction. With regard to the question whether she knew that she was evading tax, she states that it follows from the case-law of the Court that the recipient of an invoice does not have to carry out tax checks and is not obliged to investigate all chain participants.

The administrative and labor courts of Hungary question whether the mere fact that the tax authorities have established that the content of the invoices is not credible can form a basis for the refusal of the right to deduct VAT. It is doubtful for the referring court whether the direction, scope and depth of such a check are consistent with the principles of fiscal neutrality, effectiveness and proportionality. Furthermore, the question arises as to whether the practice of the tax authorities meets the requirement of proof in accordance with legal obligations, when he expects a taxable person to check the circumstances with a thoroughness that is incompatible with the time-limit for carrying out transactions in the course of trade and which is objectively impossible for other reasons, while considering the circumstances that led to the establishment of does not fully map the chain. In summary, in its questions the referring court asks whether the scope, depth and scope of the evidence required by the tax authorities as a condition for exercising the right to deduct VAT,


  • Are national interpretation and practice compatible with Directive 2006/112 and with the principle of fiscal neutrality
  • if they result in the tax authorities having the right to refuse input VAT deduction over a transaction between parties
  • on the ground that the form of the legal relationship between the parties is fraudulent .. as parties’ behavior was aimed at tax evasion
  • In connection therewith, is a condition for exercising the right to deduct VAT subject to the taxable person’s obligation to choose a form for their economic activities that results in a higher tax burden for them?
  • Can it be considered an abuse if the parties, in the exercise of their contractual freedom and for non-tax purposes, opt for a form of contract that involves the unintended effect of being entitled to input VAT credit


  • Are national interpretation and practice compatible with Directive 2006/112 and with the principle of fiscal neutrality
  • if they result in the tax authorities meeting a taxable person who meets the substantive and formal conditions for the right [to deduct VAT] and who, prior to the conclusion of the contract, took all measures that could reasonably be expected of him,
  • refused that right on the grounds that he did not consider it necessary to set up the chain economically and that there is therefore abuse,
  • since the subcontractor, despite being able to provide the services, engages other subcontractors for non-tax purposes, and because the taxpayer who wishes to exercise the right to deduct VAT at the time of the acceptance of the contract, it knew that its subcontractor would perform the contract in the absence of material and human resources with the involvement of its own subcontractors?
  • Is the answer to the question influenced by the fact that the taxpayer or his subcontractor has involved a subcontractor in the chain with whom he has a direct relationship or a personal or organizational relationship (personal knowledge, family or ownership)?


  • If the answer to the previous question is in the affirmative:
  • is the requirement to establish the facts on the basis of objective circumstances met where the tax authorities .. bases this solely on the witness statements of a number of employees of the subcontractor,
  • without reviewing the characteristics and specific circumstances of the economic activity .. and without hearing the decision-making directors of the taxpayer and the subcontractors involved in the chain?
  • If so, is it relevant whether the taxable person or the participants in the chain are capable of providing the services and is it necessary to appoint an expert to investigate this?


  • Are national interpretation and practice compatible with Directive 2006/112 and the principle of effectiveness
  • when they allow the tax authorities to refuse input VAT recovery on the basis of circumstances which are not objective
  • solely on the ground that those circumstances occur in their entirety for a sufficiently large number of the participants in the established chain that have been investigated?