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Hungary: Tax authority must grant taxpayer access to records (CJEU judgment in VAT case)

Hungary: CJEU judgment in VAT case

The Court of Justice of the European Union (CJEU) issued its judgment in a case challenging the tax authority’s approach during tax audits and related appeal procedures.


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The CJEU concluded that the tax authority cannot rely on national law to deny a taxpayer access to documents upon which an adverse determination against the taxpayer is based (in this case, concerning value added tax (VAT) issues).

The case is: Glencore Agriculture Hungary (C-189/18 (16 October 2019)


Hungary's tax authority rejected a claim to deduct an amount of VAT based on the findings and evidence of previous tax inspections and ongoing criminal proceedings against the taxpayer’s suppliers.

The taxpayer challenged the denial of its claim to deduct VAT, noting in part that it was not allowed access to documents on which the tax authority based its findings (that is, documentation of criminal proceedings initiated against the taxpayer’s suppliers and reports of the tax inspections). The taxpayer asserted that the tax authority had violated the taxpayer’s right to due process.

The CJEU found that taxpayers must be granted the right to challenge the findings and evidence upon which the tax authority has based its adverse decision against the taxpayer in the course of the taxpayer’s own procedure. Accordingly, the CJEU concluded that Hungarian tax procedural measures do not relieve the tax authority of its obligation to inform the taxpayer of the evidence upon which an adverse determination has been made. The taxpayer’s access to such files can be restricted only to serve the public interest (for example, to protect personal data or pursuant to law enforcement efforts).

Read a November 2019 report prepared by the KPMG member firm in Hungary

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