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Flashback on ECJ cases C-434/17 (Human Operator) – Determination of the taxable person liable for VAT – Retroactive application of a derogating measure

On March 22, 2019, the ECJ issued its decision in the case C-434/17 (Human Operator).

Article in the EU VAT Directive

Article 193 of the EU VAT Directive 2006/112/EC (Liability to pay VAT)

Article 193
VAT shall be payable by any taxable person carrying out a taxable supply of goods or services, except where it is payable by another person in the cases referred to in Articles 194 to 199b and Article 202.


The applicant (Human Operator) is a commercial company established in Hungary, whose main activity is the provision of personnel services. The defendant (tax authority in the first instance) carried out a tax check – retrospectively – of the sales tax returns for January 2015 at the applicant’s. Following this check, the defendant determined by decision of 22.08.2016 that between the amount of the VAT paid and due difference amounted to HUF 46,065,000. The defendant ordered the applicant to pay that difference and also imposed a tax fine, a delay allowance and a default fine on the basis of other facts and legal bases. Defendant argues that according to §142 (1) c of the Hungarian VAT Act in the case of services relating to temporary work, the tax is to be paid by the recipient of the good or the recipient of the service, and in this case it is conditions are met. Hungary is authorized under Implementing Decree 2015/2349 to levy tax under the reverse charge mechanism, and since its request for authorization to impose a derogation measure was directed to that effect and also provided for in Article 294 (1) of the VAT Act, the rule should in the case of the applicant to be applied from 01.01.2015. The appeals directorate of the national tax and customs administration has confirmed the aforementioned decision by decision of 25.01.2017.

In her petition, the applicant requested a legal review of these final decisions of the tax authority. The applicant submits that Hungary could not apply Implementing Decision 2015/2349 before it was notified of its adoption, that is to say, that decision was not applicable throughout the period at issue. The applicant further submits that, on the other hand, the same decision has no retroactive effect and that the general provisions on entry into force do not permit such effect.

In accordance with the exchange of documents, Hungary wished to obtain the authorization for a period of three years from 01.01.2015, which Hungary communicated to the Commission in June 2015. On the other hand, the file contains a letter from the European Commission dated 06.04.2016, in which the applicant was informed that Implementing Decision 2015/2349 does not apply retroactively.


The referring court considers that, in order to resolve the dispute, it is necessary to interpret the provisions of Implementing Decision 2015/2349 as well as to obtain clarification as to how, in the above circumstances, the fact that that implementing decree does not determine from which date it will enter into force, nor from which date it will apply, and whether the absence of this provision implies acceptance of the request with regard to the aforementioned starting date of application, or, in the absence of a express provision, despite the content of the request, retroactive application is not possible.



Must Council Implementing Decision (EU) 2015/2349 1 of 10 December 2015 be interpreted as precluding the Hungarian practice of considering that the provision of national law, approval of which derives from the abovementioned Implementing Decision and which establishes a derogation from Article 193 of Council Directive 2006/112/EC, entered into force on 1 January 2015, the date from which it must be applied, when that Implementing Decision contains no provision concerning retroactivity of its effects or of its applicability and, in its request for authorisation to establish the derogation, Hungary indicated that date as the date of application?

AG Opinion



European Union law precludes national legislation which provides for the application of a measure derogating from Article 193 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2013/43/EU of 22 July 2013, before the EU act authorising that derogation has been notified to the Member State which requested it, despite the fact that that EU act does not mention the date of its entry into force or the date from which it applies, even if that Member State has expressed the wish for that derogation to apply with retroactive effect.











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