Comments on ECJ C-521/24: CJEU Rules Against Hungary’s Strict Formalism in VAT Deduction for Late Invoices

Late availability of VAT invoices does not prevent deduction of input tax

The Court of Justice ruled against Hungary’s refusal of VAT deduction for Aptiv Services Hungary Kft. on intra-Community acquisitions (UCIs) from 2016-2018, even though Aptiv only received the relevant invoices in 2021.
The Court stated that the late availability of invoices in 2021 does not prevent the deduction in that year, emphasizing that Aptiv acted in good faith and within the limitation period.
The ruling upholds the principle of effectiveness, ensuring a taxable person can exercise their right to deduct VAT when they actually receive the necessary invoices, especially if no other procedural mechanisms for deduction are available.

The CJEU found that Hungary’s tax authorities unlawfully refused Aptiv Services Hungary Kft.’s VAT deduction for intra-Community acquisitions (UCIs) where invoices were received years late.
Aptiv, acting in good faith and with no tax fraud, sought to deduct input VAT in 2021 upon receiving invoices from 2016-2018, but the Hungarian Tax Agency insisted on corrections to the original years’ returns, for which the self-correction period had expired.
The CJEU ruled that denying the deduction, given that the right to deduct arises when the invoice is held and that formal requirements should not impede the right to deduct when conditions for deduction are met, violated the VAT Directive and the principles of fiscal neutrality, effectiveness, and proportionality, making the exercise of the right to deduct excessively difficult or impossible.