On 3 June 2026, the General Court of the European Union delivered its judgment in Case T-198/25, G Kft., addressing a request for a preliminary ruling concerning the interpretation of Articles 167, 168, 179, 180, 183, 250 and 252 of the VAT Directive, as well as the principles of effectiveness, fiscal neutrality and proportionality, in the context of the regularisation of VAT incorrectly invoiced in respect of a period already closed by a tax audit.
The General Court examined whether EU law precludes national legislation that limits the possibility of regularising VAT incorrectly invoiced where the period concerned has already been subject to a tax audit, unless the taxable person provides a new element capable of altering the conclusions reached in that audit.
The dispute arose between G Kft., a Hungarian company engaged in the rental of reusable crates and pallets to fruit producers, retailers, wholesalers and food processing companies, and the Appeals Directorate of the Hungarian National Tax and Customs Administration.
The controversy arose because the company had invoiced VAT on certain deposits linked to the delivery of those goods, even though it was subsequently considered that those transactions did not fall within the scope of VAT. Specifically, G Kft. applied a deposit system under which, when delivering the crates and pallets to its customers, it invoiced certain amounts intended to encourage the return of the goods within the prescribed period. If the customer returned only part of the goods, the relevant invoices were adjusted; if all the goods were returned, the invoices were cancelled. However, those invoices included VAT, although the Hungarian authorities subsequently considered that those deposit transactions should not have been subject to that tax.
Following the opening and completion of a tax audit relating to the period from January 2015 to July 2017, the company requested, in November 2020, the opening of a new audit in order to regularise the VAT incorrectly invoiced. The Hungarian tax authority refused that request on two occasions, taking the view that there was no new fact or circumstance, as required under national law in order to reopen a period already closed by a tax audit.
A Hungarian court referred a question to the General Court for a preliminary ruling in order to determine whether the VAT Directive and the principles of effectiveness, fiscal neutrality and proportionality preclude national legislation that makes the regularisation of VAT incorrectly invoiced in respect of a period already audited conditional upon the existence of a new element capable of altering the conclusions of the previous audit.
For its part, G Kft. argued that the VAT had been incorrectly invoiced and paid, and that there was therefore no loss to the tax authority. However, the Hungarian authorities considered that the company had had the opportunity to correct its position earlier, whether before the tax audit began, during the audit procedure itself, or by challenging the decision that brought that procedure to an end in August 2018.
The Court concluded that the VAT Directive and the principles of effectiveness, fiscal neutrality and proportionality do not preclude national legislation of this kind, provided that the taxable person has been able effectively to exercise its right to regularisation within a reasonable period. In this regard, the Court considered it relevant that G Kft. had had more than three years in which to request the regularisation of the VAT: before the opening of the tax audit, during the audit procedure itself and, subsequently, through a possible appeal against the decision that brought that audit to an end. Accordingly, the Court held that the refusal to open a new tax audit did not amount to an absolute and disproportionate denial of the right to regularise the VAT, but rather to the application of a procedural rule that is permissible from the perspective of EU law.
Consequently, the General Court confirmed that a taxable person who has incorrectly invoiced VAT may request its regularisation, but that such right must be exercised in accordance with the procedural rules and time limits laid down by national law. Where the period has already been closed by a tax audit, the Member State may require the existence of a new element in order to reopen it, provided that the taxable person had previously had a genuine and reasonable opportunity to correct its position.
How can we assist you?
With more than 30 years of experience in tax advisory services, Salinas & Partners is available to assist you with the review of transactions subject to VAT, the regularisation of amounts incorrectly invoiced, the preparation of corrective invoices and the assessment of risks arising from tax audits that have already been closed.
