In Sea Chefs Cruise Services GmbH v Ministre de l’Action et des Comptes publics (C-133/18), Advocate General Hogan has opined that the fact a trader failed to comply with an information request within the time limit provided by Directive 2008/9/EC (the Directive) is not fatal to its claim for a refund.


Sea Chefs Cruise Services GmbH (the taxpayer), applied to the French tax authorities for the refund of a VAT input tax credit. The claim was dismissed as a result of the taxpayer’s failure to respond, within the requisite time limit, to a request for further information made by the French tax authorities. The French tax authorities also claimed the taxpayer could not submit the requested information late as part of an appeal.

The matter was appealed to the Administrative Court, Montreuil. The Court observed that in order to guarantee the effectiveness of the VAT system, the Directive established time limits. Article 20(2) of the Directive provided that the information requested must be provided within one month. The French tax authorities had dismissed the taxpayer’s claim in its entirety for failure to comply with this time limit. However, the Court noted that neither the Directive, nor any national provision set out consequences for the right to a VAT refund where the time limit to reply is not respected. This was considered critical to resolution of the dispute and in particular, whether the taxpayer should be allowed to regularise its position.

Accordingly, the Court referred the matter to the Court of Justice of the European Union (CJEU) for a preliminary ruling on whether the limitation rule in Article 20(2) of the Directive was compatible with the principles of fiscal neutrality and proportionality.

Advocate General’s opinion

Advocate General Hogan (AG) released his opinion on 17 January 2019.

The AG observed that although the right to deduct is a “fundamental principle of the common system of VAT” it is subject to compliance with both substantive and formal requirements. The AG also observed that despite the parallels that have been drawn in the CJEU case law between the right to deduct VAT and the right to a refund of VAT, the rules in the Directive on the information which a refund application must contain and the time limits for the submission of a refund application, are much more detailed than those in respect of the deduction of VAT contained in Directive 2006/112.

The AG noted that it is not clear from the wording itself of Article 20(2) of the Directive, whether the time limit is mandatory, as terms such as “no later than” or “at the latest” are absent from the provision. He did not consider this to be mere happenstance. Given the fundamental nature of the right to a VAT refund in the context of the VAT system, the establishment of mandatory time limits leading to the forfeiture of that right would have to be set out in a “clear and unequivocal manner by explicit language contained in the directive itself”. In the view of the AG, this strongly indicated that the interpretation adopted by the French authorities was incorrect.

The AG also considered the following points as further evidence that the time limits laid down were not intended to be mandatory (in the sense that non-compliance automatically extinguishes the right to deduct):

  •  Article 20(1) applies regardless of the addressee of the request for additional information. This could, for example, render entitlement to a refund vulnerable to the actions of third parties, some of whom may not be able to respond within the designated time. The AG considered it would be unfair if the failure on the part of a third party could result in the forfeiture of a taxpayer’s right to a refund
  •  Article 21 (notification of decision) does not prevent a member state approving a refund despite non-compliance with the information request
  •  Article 26 provides that a tax authority is not required to pay interest to a taxpayer who fails to comply with an information request on time. This suggests that the legislators had anticipated the possibility of a successful refund claim despite no, or late compliance, with an information request.

For all of these reasons, the AG concluded that the time limit prescribed by Article 20(2) is not mandatory. The taxpayer could therefore submit the additional information (in the context of an appeal pursuant to Article 23) with a view to regularising its refund application.

Having reached this conclusion, the AG did however observe that failure to comply with the time limit is not without consequences for example, a late response may have implications for the taxpayer’s entitlement to interest on the late payment of a refund.


This opinion provides useful guidance on how the CJEU is likely to interpret the wording of the Directive, particularly in circumstances where a fundamental right, such as a VAT refund, may be subject to forfeiture. Any curtailment of such rights should be set out in a clear and unequivocal manner by explicit language contained in the Directive itself.

In this instance, it would appear the French parliament did not seek to lay down a mandatory time limit and envisaged such claims being paid even where the time limit is breached. We anticipate that the CJEU will agree with the AG’s opinion. A decision is expected shortly.

A copy of the AG’s opinion can be viewed here.