In this ruling, the CJEU examined what happens when a technical failure prevents a VAT refund claim from being properly processed under the EU refund procedure set out in Directive 2008/9/EC. A French company had submitted a claim for VAT paid in Italy through the mandatory electronic procedure, within the required deadlines. The claim was never registered due to an IT failure on the Italian Tax Authority’s side, which subsequently rejected it on the grounds that no valid request had been received in time.
The question before the Court was straightforward: can a taxpayer lose its right to a VAT refund because of a technical failure it had no part in causing?
The Court’s answer was clear. Relying on the principles of fiscal neutrality, effectiveness and proportionality, it held that a Member State cannot deny a refund solely on the basis of an IT malfunction, where the taxpayer has followed the correct procedure and acted in good faith. A technical failure on the part of the tax authority cannot be used against a taxpayer who has properly exercised their rights.
