The European Court of Justice (ECJ) delivered its decision in the Sea Chefs Cruise case on 02 May 2019.
► CJUE, Case C-133/18, Sea Chefs Cruise Services GmbH, 2 May 2019
The company Sea Chefs Cruise, established for VAT purpose in Germany, made an online VAT refund request, pursuant to the procedure specified in Council Directive 2008/9/EC of 12 February 2008.
Using the option under Article 20 of this Directive, French tax authorities sent an electronic request for additional information to the company, in order to process the refund request.
Sea Chief Cruise failed to reply within the one-month period provided for under legal provisions and the authorities rejected the company’s refund request for this sole reason.
After the case was referred to the French Supreme Court “Conseil d’Etat”(Conseil d’Etat , 8th and 3rd ch. October 18th 2017, no. 412016 and 412053) which ruled on the question of burden of proof concerning electronic sending and receiving of a request for additional information, the Montreuil administrative court again ruled on a stay of proceedings in order to refer for preliminary ruling before the ECJ regarding the consequences of failure to reply within the one-month period provided for under the abovementioned provisions (Montreuil administrative court , February 14th 2018, no. 1602615).
More specifically, it was for the court to decide, where the Directive is silent, if the period of one month, provided for under II of Article 242-0 W of Annex II of FTC (Directive 2008/9/EC article 20 point 2) for responding to a request for additional information made by the tax authorities, should be regarded as a mandatory time limit, allowing the refunding member state to refuse VAT refund should no reply be received within said period.
The ECJ decision
The ECJ ruled, in accordance with the principles of proportionality and neutrality, that the one-month period in which the taxable person should reply to the request for additional information is not a foreclosure period. The taxable person may, therefore, regularise their positions after this period by providing the requested information before the judge.
The ECJ decision highlights the flexibility in interpreting procedural rules regarding VAT refunds for foreign companies. This decision may allow companies who are refused a refund to submit a new request, subject to providing the information requested by the refunding member state.
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