ECJ Rules in Favour of Aptiv Services Hungary in Landmark VAT Case on Late Invoices (C 521/24)

April 13, 2026 Einblicke

On 12 March 2026, the Court of Justice of the European Union (ECJ) delivered its judgment in Case C‑521/24, Aptiv Services Hungary Kft ( hereinafter”Aptiv”), offering long‑awaited clarity on a highly practical VAT issue that affects businesses across the EU, whether input VAT may be deducted when invoices relating to purchases are only received several years after the underlying transactions.

The ruling decisively rejects overly formalistic national practices that prevent businesses from exercising their right to deduct VAT even when acting in full good faith and has led to changes in approach for all EU Member States.

How the Case Arose: A Bureaucratic Trap Caused by Late Invoices

Aptiv purchased goods through intra‑Community acquisitions (ICA’s)during 2016–2018. However, due to delays by its suppliers, Aptiv did not receive the invoices until 2021, in some cases five years after the transaction.

Under Article 178(c) of the EU VAT Directive, a taxable person must physically hold a valid invoice to deduct input VAT on ICA’s. In simple terms, no invoice = no deduction.

As Aptiv only obtained the invoices in 2021, Aptiv could not legally declare the deductions in its 2016–2018 VAT returns. Instead, Aptiv correctly reported the VAT in its 2021 VAT return, the first period in which the formal condition (possession of the invoice) was fulfilled. Unfortunately, this placed Aptiv in a bureaucratic paradox.

The Implications: Statute of Limitations and an Impossible Loop

Hungary’s statute of limitations allows taxpayers to amend (“self‑rectify”) VAT returns only within three years. By 2021, the 2016–2018 periods had expired, meaning Aptiv had no lawful route to deduct the VAT in the earlier periods.

Despite this, the Hungarian tax authorities rejected Aptiv’s 2021 deduction claim, insisting that the company should have amended the original 2016–2018 VAT returns even though this had become legally impossible by the time the invoices arrived.

As a result, Aptiv faced the prospect of bearing the entire VAT cost itself, contrary to fundamental EU VAT principles. Under EU law, VAT should ultimately burden the final consumer, not businesses engaged in taxable transactions.

This “catch‑22” situation, unable to deduct in the original periods due to missing invoices and unable to amend those periods later due to expired deadlines, led the Hungarian court to refer the matter to the European Court of Justice (ECJ).

The ECJ’s Decision: Formalities Cannot Override the Right to Deduct

The ECJ ruled in favour of Aptiv, holding that Hungary’s practice of denying the deduction solely because the claim was made in a later period (when the invoice was finally received) violates EU law.

The Court found that:

  • A Member State may not refuse input VAT deduction where:
    • the taxpayer acted in good faith,
    • the invoice was received late, and
    • the deduction was claimed within the applicable limitation period.
  • National rules cannot make the exercise of the right to deduct “excessively difficult” or impossible.
  • Formal conditions such as invoice‑timing requirements cannot undermine the principle of VAT neutrality, which is a cornerstone of the European VAT legislation.

The Court emphasised that the right to deduct is a fundamental element of the VAT legislation and cannot be blocked on purely procedural grounds when substantive conditions are satisfied.

Implications for EU VAT Legislation and Member State Practice

This judgment has significant and immediate implications across the EU such as:

  • Member States must allow VAT deductions in the period the invoice is actually received, even if the underlying transactions relate to earlier years.
  • National practices or legislation that deny deduction based solely on timing of the invoice or which rely on procedural obstacles, such as closed amendment periods must be amended.
  • The ruling strengthens the interpretation of the EU VAT Directive in light of:
    • Fiscal neutrality,
    • Proportionality, and
    • Effectiveness.
      Like earlier judgments, this ruling reinforces that substance takes precedence over form in EU VAT law.

Schlussfolgerung

Aptiv’s judgment provides long‑needed clarity for businesses facing delayed supplier invoicing. It confirms that the right to deduct VAT cannot be denied due to procedural timing issues outside the taxpayer’s control. The decision strengthens VAT neutrality and will require adjustments in national VAT practices across the EU to ensure that late invoices no longer result in unjust VAT costs for compliant businesses.

If your organisation regularly engages in cross‑border transactions or faces issues with late invoices, this ruling may significantly enhance your ability to recover VAT that was previously at risk.

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