Restitution of overpaid VAT – clouds and silver linings
EU law has thrown up some very abstruse issues, none more so that the compatibility of national VAT regimes with European VAT Directives. Where there has been a charge to tax pursuant to national rules which infringe EU law, then that overpayment of tax can be recovered.
Sometimes the issue concerns a relatively straightforward overpayment. For example, the Irish Times reported a little while ago that GE Capital Woodchester Ltd has brought legal proceedings against the Revenue claiming it has overpaid some €19 million due to the State’s alleged failure properly to implement an EU directive related to the VAT treatment of hire purchase transactions. The principle of restitution of overpaid taxes is well established at Irish law (see O’Rourke v The Revenue Commissioners [1996] 2 IR 1 (HC, Keane J) and Harris v Quigley [2006] 1 IR 165, [2006] 1 ILRM 401, [2005] IESC 79 (01 December 2005) following Woolwich Building Society v Inland Revenue Commissioners [1993] AC 70 (HL) (pdf); see also In re Article 26 and the Health (Amendment) (No 2) Bill, 2004 [2005] IESC 7 (16 February 2005)) so the main question in the Woodchester proceedings (at least as they appear from the newspaper report) will be whether the overpayment is in fact made out.…