The Polish leasing company Caterpillar Financial Services offers its lessees the option of insuring the leased property. If desired, the insurance contracts are concluded by Caterpillar Financial Services with an insurance company. At first, Caterpillar exempted these premiums from VAT on the invoices issued to lessees. However, following a Polish judgment in 2010, Caterpillar filed rectified VAT invoices showing VAT arrears. Following judgment in BGŻ Leasing , Caterpillar filed an application with the Polish tax authorities for a refund of the overpaid VAT for the period from December 2005 to December 2011. The Polish tax authorities refused to refund the overpaid VAT for certain months in the period from December 2005 to November 2007, citing the expiry of the limitation period. However, for the period from December 2007 to December 2011, it did refund the overpaid VAT. According to the ECJ, the principles of equivalence and effectiveness do not preclude national legislation under which an application for a refund of overpaid VAT can be rejected if this application is submitted after the expiry of a five-year limitation period, although a judgment of the ECJ ruled after the expiry of that period, it follows that the VAT was not due.
The principles of equivalence and effectiveness, read in the light of Article 4(3) TEU, must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which allows a request for a refund of an overpayment of value added tax to be refused where that request was submitted by the taxable person after the expiry of the five-year limitation period, although it follows from a judgment of the Court, delivered after the expiry of that period, that the payment of the VAT which is the subject of that request for a refund was not payable.