European Court judgment on input VAT deduction for late invoices

In a judgment delivered in spring 2026 (Case C-521/24, Aptiv), the European Court once again ruled on a matter concerning Hungarian VAT practice. The underlying issue in the dispute related to the deductibility of VAT on intra-Community acquisitions of goods, specifically the interaction between late invoices and domestic limitation rules.

Under Hungarian tax authority practice and the strict framework of the VAT Act, the existence of an invoice is a fundamental substantive condition for exercising the right to deduct input VAT. A critical situation arises when the acquirer receives the invoice only years later for reasons beyond its control. Under Hungarian rules, the VAT on late invoices can, as a general rule, only be claimed through self-revision for the original tax period.

The most sensitive aspect of this case concerned limitation. It is important to emphasise that the CJEU judgment does not state that taxpayers may deduct VAT for already time-barred periods without restriction. On the contrary, the Court confirmed that Member States may legitimately impose time limits (limitation periods) on the right of deduction in the interests of legal certainty.

The turning point in the specific case was that when the taxpayer received the late invoice and included the VAT in the return for the current tax period, the relevant period had not yet become time-barred. Limitation only occurred later, during a tax authority audit. Nevertheless, the authority refused the deduction on the grounds that it should have been claimed through self-revision for the original period, which had by then become impossible due to the expiry of the limitation period.

The European Court ruled that this rigid application of the law is contrary to the principles of tax neutrality and proportionality. Where the acquirer acted in good faith, no tax evasion occurred, and — most importantly — the taxpayer exercised its right of deduction within the limitation period at the time the invoice was received, Member States may not impose such strict administrative or procedural obstacles (such as requiring self-revision exclusively) that ultimately render the exercise of the right to deduct VAT impossible in substance.

The judgment makes it clear that it is incompatible with EU law to refuse a deduction on purely formal grounds to a taxpayer who was still entitled to exercise the right of deduction when the invoice was received. As the Court’s decision is binding, it is expected to shape the relevant Hungarian legal environment in the future.

Should you have any questions, please feel free to contact Niveus’s experts.