Recent ECJ Decisions

On 15 March 2007 the European Court of Justice (ECJ) gave judgement in Reemtsma (case C?35/05), a claim for repayment of tax in another Member State under the Eighth Directive (or Section 82 VATA). The ECJ Decision formulated general principles applicable to repayment of tax and hence knowledge of these principles is important both for any Czech tax payer requesting repayment of tax in another Member State, as well for persons liable for tax in another Member State who seek a tax refund in the Czech Republic. The obligations of the tax authority are limited to refunding tax deducted by a supplier under VATA. Refund of tax applied to supplies by mistake, in error or in ignorance by the supplier is inadmissible. Only the supplier is eligible to apply for a tax refund. In exceptional circumstances, if it would be unreasonably difficult or impossible to refund tax to the supplier, Member States nevertheless have a duty to create instruments to allow them to repay tax directly to the recipient of the supply.