The CJEU has held that the European VAT regulations give the purchaser a direct right to apply to the tax authorities for a refund of the VAT paid to suppliers without being due, even if the purchaser can no longer claim it from those suppliers because of the occurrence of the statute of limitations.
The Court emphasised that the principle of fiscal neutrality and the right of recipients of supplies of goods to receive back VAT paid but not due may be invoked against the tax authorities because the cases in which refunds may be refused are strictly limited to a fraudulent or negligent conduct of those entitled to them.
Therefore, the tax authority may not refuse to refund VAT directly to the purchaser on the grounds (i) that any claim by the purchaser to recover VAT from suppliers is time-barred or (ii) that there is a risk of double refund because suppliers might subsequently submit their own claims for VAT refunds to the tax authority.
