The European Court of Justice (ECJ) gave a preliminary ruling on 21 October 2015 in the Kovozber case. Reference had been made to the ECJ by the Regional Court of Kosice (Slovak Republic) for a ruling on the following issues:

1. Should the first paragraph of Article 183 of the EU VAT Directive 2006 be interpreted to mean that it precludes national legislation which, in determining the conditions for refunding excess VAT deductions, makes payment of default interest on the delayed refund conditional on the expiry of a ten day period after the end of the tax inspection to assess whether the refund claim is justified?

2. If the answer to that question is yes, is it for the national court, in the absence of national legislation on default interest after a period of ten days from completion of a tax inspection, to determine appropriate legal rules on interest at its own discretion?

Relevant provisions of the EU VAT Directive 2006

The first paragraph of Article 183 of the Directive provides as follows:

Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period.

The second paragraph of the Article provides that Member States may refuse to refund or carry forward if the amount of the excess is insignificant.

ECJ Decision

The ECJ ruled on 21 October 2015 that the first paragraph of Article 183 should be interpreted as precluding national legislation which prescribes that default interest relating to the refund of excess value added tax is to be calculated only as from ten days after completion of the tax inspection.