ECJ C-527/24 (Harry and Associés) – Judgment – Technical Fault Cannot Bar VAT Refund and Access

On March 12, 2026, the ECJ released the judgment in the case C-527/24 (Harry and Associés).

Context: Reference for a preliminary ruling — Taxation — Common system of value added tax (VAT) — Directive 2006/112/EC — Refund of VAT — Directive 2008/9/EC — Articles 2, 15 and 23 — Principles of neutrality of VAT, effectiveness and proportionality — Taxable person established in a Member State other than that in which VAT was refunded — Application for refund of VAT — Technical malfunction in the electronic transmission of the application — Inaction on the part of the State’s tax authorities Member of the Reimbursement to whom the application has been made – Final judicial decision – Res judicata’

Article in the EU VAT Directive 2006/112/EC.

Article 167 of the EU VAT Directive 2006/112/EC.

Article 167
A right of deduction shall arise at the time the deductible tax becomes chargeable.

Facts

Facts:
- Harry et Associés Sarl, a French company, sought a VAT refund from Italy for 2015. The electronic refund request, submitted via the French tax administration to the Italian tax authorities (COP), contained technical errors making it unreadable by the COP, despite being duly received.
- The COP did not process or examine the request and remained inactive. Harry et Associés Sarl initiated legal proceedings, and although an initial judgment favored them, subsequent appeals by the COP led to the request being deemed non-existent and the appeal inadmissible due to the technical dysfunctions, a decision upheld by the Italian Supreme Court.
Questions to the Court:
- Does EU law (specifically Article 167 of the VAT Directive, principles of VAT neutrality and proportionality) oppose national rules that deem a VAT refund request ineffective due to technical IT errors, thereby denying judicial access and the right to refund, even when the refund is due?
- Does it oppose a legal principle, as affirmed by the Italian Supreme Court, that a VAT refund request unreadable by the tax administration due to technical transmission issues cannot lead to an implied rejection decision appealable in court, thus precluding direct judicial access and potentially forfeiting the refund right?
Decision:
- The Court of Justice of the European Union (Ninth Chamber) ruled that national regulations, as interpreted by a definitive judicial decision, that deny both the right to a VAT refund and access to justice for an undertaking established in another Member State are contrary to EU law.
- This applies when the denial is based on a technical dysfunction during the electronic transmission of the refund request, leading to the request being deemed not “introduced.”
Justification Decision:
- The Court emphasized that the principles of VAT neutrality, proportionality, and good administration require the tax administration to consider a duly transmitted electronic refund request as “introduced” even with technical dysfunctions, provided the errors are not attributable to the applicant. The administration should also notify the applicant of such issues and allow for correction.
- Furthermore, the principle of effectiveness dictates that national rules on procedural autonomy must not make the exercise of EU-derived rights impossible or excessively difficult. Denying judicial recourse against the inaction of a tax administration due to technical errors, especially when a previous judicial decision based on an incorrect interpretation of EU law has res judicata effect, infringes upon the right to an effective remedy under Article 47 of the Charter of Fundamental Rights of the EU.

Questions

Do Article 167 of Directive 2006/112/EC and the general principles of VAT neutrality and proportionality of the limitation of the right to deduct VAT preclude:
– (a) national rules – identifiable with Article 21(2) of Legislative Decree 546/1992 and Article 38 bis.2 of Presidential Decree No 633/1972 – which, in domestic law, by allowing a refund
application vitiated by technical computer errors to be declared as devoid of effect, preclude access to the courts, and are such as to entail forfeiture of the right to be refunded in a substantive situation in which the VAT refund is due to the taxpayer;
– (b) a principle of law, such as that affirmed by the Supreme Court of Cassation, whereby ‘an application for refund of a VAT credit, which, owing to technical faults in the electronic transmission, is not visible to the tax authorities, is not suitable for creating a situation of appealable silent denial, as the tax authorities are not in a position to take action’, such as to preclude direct access to the courts in the case at hand, and therefore such as to entail forfeiture of the right to a refund even in a substantial situation in which the refund is due?’

AG Opinion

None

Judgment

Article 170 and Article 171(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2008/8/EC of 12 February 2008, read in conjunction with Article 15(1), second sentence, Article 20(1), and Article 23(2) of Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State, as well as with the principles of VAT neutrality, proportionality, and good administration,

must be interpreted as meaning that:

they preclude national legislation, as interpreted by a final judicial decision, according to which a taxable person established in a Member State other than that of the VAT refund is deprived both of the right to a VAT refund and of the right of access to a court to challenge the inaction of the tax administration of the Member State of refund, to which that taxable person’s VAT refund application has been submitted, on the ground that that application cannot be deemed to have been introduced due to a technical malfunction that occurred during its electronic transmission.

Source