Flashback on ECJ Cases – C-294/11 (Elsacom) – 8th VAT Directive Refunds – Six-month period is a strict deadline for submitting a request for the refund of VAT

On June 21, 2012, the ECJ issued its decision in the case C-294/11 (Elsacom).

Context: Eighth VAT Directive — Arrangements for the refund of VAT to taxable persons not established in the territory of the country — Time-limit within which refund applications are to be submitted — Time bar

Article in the EU VAT Directive

Article 2, 3(a), 7(1) and 15(1) of the Eighth VAT Directive

Article 2

Each Member State shall refund to any taxable person who is not established in the territory of the country but who is established in another Member State, subject to the conditions laid down below, any value added tax charged in respect of services or movable property supplied to him by other taxable persons in the territory of the country or charged in respect of the importation of goods into the country, in so far as such goods and services are used for the purposes of the transactions referred to in Article 17(3)(a) and (b) of Directive 77/388/EEC and of the provision of services referred to in Article 1(b).

Article 3(a)

To qualify for refund, any taxable person as referred to in Article 2 who supplies no goods or services deemed to be supplied in the territory of the country shall:

(a) submit to the competent authority … an application ….

Article 7(1)

Applications shall be submitted to the competent authority … within six months of the end of the calendar year in which the tax became chargeable.

Section B of Annex C

‘The application shall be … submitted by 30 June of the year following that to which the application relates …

Article 15(1)

The refund application shall be submitted … at the latest on 30 September of the calendar year following the refund period. …

Facts

The tax authorities refused to refund the VAT which Elsacom had paid on the basis of invoices received from its trading partners in Italy in 1999. The relevant refund application was submitted on 27 July 2000. The reason given by the tax authorities for refusing the application was that it was out of time, since the time‑limit for submitting it under the second subparagraph of Article 1 of Decree No 2672 of the Minister for Finance of 20 May 1982 expired on 30 June 2000.
The Commissione tributaria provinciale di Roma (Provincial Tax Court, Rome) upheld the action brought by Elsacom against the tax authorities’ decision, taking the view that the six‑month period from the end of the year to which the tax relates laid down in the last sentence of the first subparagraph of Article 7(1) of the Eighth VAT Directive was simply indicative in nature and was not, therefore, a mandatory time‑limit.
The tax authorities appealed against that decision before the Commissione tributaria del Lazio, which upheld the decision of the Commissione tributaria provinciale di Roma.
The tax authorities brought an appeal in cassation against that judgment before the Corte suprema di cassazione (Supreme Court of Cassation), arguing that the period in question is in fact a mandatory time‑limit.

Questions

Is the period of six months from the end of the calendar year in which value added tax became chargeable, being the time allowed for taxable persons not established in the territory of the country to submit an application for refund of that tax — as laid down in the last sentence of the first subparagraph of Article 7(1) of [the] Eighth [VAT] Directive — a mandatory time-limit, that is to say, a time‑limit non-compliance with which results in forfeiture of the right to a refund?

AG Opinion

None

Decision

The six-month time‑limit laid down in the last sentence of the first subparagraph of Article 7(1) of Eighth Council Directive 79/1072/EC of 6 December 1979 on the harmonization of the laws of the Member States relating to turnover taxes — Arrangements for the refund of value added tax to taxable persons not established in the territory of the country — for submitting an application for a value added tax refund is a mandatory time‑limit.

Summary

The six-month period of the Regulations for the refund of VAT to taxable persons not established in the country is a strict deadline for submitting a request for a refund of VAT.

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