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CJEU RULES DEROGATION NECESSARY BEFORE REVERSE VAT RULES MAY BE IMPLEMENTED

 

The Court of Justice of the European Union (CJEU) on Wednesday ruled that Hungarian authorities may not enforce tax rules requiring a European Union derogation until notification of the EU act authorising that derogation. A court in Hungary had asked the CJEU for a preliminary ruling in a case in which staffing company Human Operator contested back taxes it was ordered to pay by the National Tax and Customs Authority (NAV) for failing to comply with reverse VAT rules in force for all staffing companies from January 1, 2015. The CJEU said the reverse charge mechanism could not be implemented before Hungary was notified of the authorisation of the necessary derogation which did not take place until December 11, 2015.