Why This Case Matters
Across the EU, tax authorities have increasingly relied on administrative criteria to restrict VAT refund claims. One of the more contentious areas involves denying input VAT because the supplier’s VAT number was invalid, revoked, or inactive, despite the fact that the supply itself was real, the invoice was accurate, and the business had no involvement in the supplier’s compliance status.
This approach places an undue burden on honest taxpayers, especially foreign companies seeking refunds through the EU 8th or 13th Directive processes. It introduces risk into supply chains, delays refunds, and can create unexpected, irrecoverable VAT costs.
The ECJ has already ruled, in various contexts, that VAT recovery cannot be denied for purely formal reasons when the substantive conditions of a supply are met. However, Member States have not always aligned their practice with this principle, making the outcome of this case particularly important.
Background: The Dispute in Romania
The case centres around whether input VAT can be denied when the supplier’s VAT number has been revoked or when the supplier is listed as “inactive” according to national criteria.
In Romania, suppliers can be classified as inactive for several reasons, ranging from failure to file returns to administrative discrepancies. When this happens, tax authorities often refuse to acknowledge the validity of invoices issued by that supplier, even if the goods or services were unquestionably delivered.
The taxpayer in C-465/25 argues that when the supply is real, the VAT is properly documented, and the buyer has acted in good faith, the right to deduct should not depend on the supplier’s administrative status.
The Romanian court has referred the matter to the ECJ for clarification, a strong indication that the issue is both unresolved and of significant importance across the EU.
The Core Question for the ECJ
At the heart of the case is a simple but powerful question: Can a tax authority deny a taxpayer’s right to recover VAT if the supplier’s VAT number has been revoked or the supplier is marked inactive, even though the supply itself actually occurred?
The ruling will determine whether Member States can continue to impose restrictive national rules that override EU principles, or whether they must respect the fundamental right to deduct VAT when substantive conditions are met.
Why Suppliers’ Status Should Not Affect VAT Recovery
From an EU VAT law perspective, the right to deduct is a cornerstone of the VAT system. Businesses should not bear the burden of VAT on inputs used in taxable activities. The ECJ has consistently held that deductibility cannot be denied due to formal irregularities, provided:
- The supply took place
- The taxpayer acted in good faith
- The goods or services were used for taxable business activity
- The invoice contains sufficient information
A supplier’s VAT status, even if revoked, does not alter these underlying facts.
To deny VAT recovery solely because of the supplier’s administrative shortcomings risks penalising compliant businesses for matters beyond their control. It would also undermine the neutrality of VAT, an essential principle that ensures the tax does not distort business decisions.
Implications for Cross-Border Refunds
Foreign businesses and multinationals are at particular risk because they cannot easily verify the day-to-day administrative status of every local vendor across multiple countries.
If the ECJ confirms that VAT recovery cannot be denied solely due to a supplier’s revoked number, this could have major implications:
- Fewer refund rejections for claims made under the 8th and 13th Directives
- Greater certainty when working with local suppliers
- Stronger grounds for appeals when VAT has been unfairly denied
- A more uniform interpretation across EU tax authorities
This will be especially relevant for industries with complex, multi-layered supplier networks, such as manufacturing, logistics, events organisation, construction, and pharmaceuticals.
Potential Outcomes to Watch
The ECJ’s eventual ruling could take several directions.
1. A strong affirmation of existing EU principles (most likely)
The court may rule that administrative issues, such as an inactive VAT number, cannot invalidate the right to an input VAT deduction when the supply is genuine and properly documented.
This would reinforce past case law and limit Member States from imposing restrictive national rules.
2. A conditional approach
The ECJ may allow some limitations if the supplier’s status indicates fraud, but require authorities to prove the buyer knew or should have known about irregularities.
This would create obligations but protect honest businesses.
3. A more restrictive outcome (less likely)
If the ECJ were to permit denial of VAT deductions based solely on the supplier’s status, this would drastically increase refund risks and inconsistencies across Member States.
Given the ECJ’s established jurisprudence, the first outcome is the most probable.
What Businesses Should Do for Now
Until the judgment is released, companies should continue to strengthen their documentation and due-diligence processes. This includes:
- Verifying supplier VAT numbers where practical
- Keeping purchase records and contracts clear and complete
- Documenting business purpose and evidence of supply
- Maintaining audit trails, especially for cross-border projects
While these measures do not provide certainty, they reinforce good faith and help protect your VAT position during audits or refund claims.
Why This Matters for VAT IT Clients
Many of VAT IT’s clients operate internationally with complex supply chains, where invoices come from multiple jurisdictions with varying administrative systems. The risk that one supplier’s non-compliance could invalidate your right to deduct VAT is both unfair and impractical.
This ECJ case is important because it may finally create clarity across all Member States, ensuring businesses are not penalised for issues outside their control. As always, VAT IT continues to monitor all developments closely, working with local partners and tax authorities globally.
When the ruling is published, our experts will provide a full analysis and explain what it means for:
- EU VAT refunds
- Supplier invoicing risk
- Recoverability under EU 8th/13th Directive
- Operational and compliance processes
- Industries with high supplier volumes
- Businesses with centralised or outsourced procurement
We will ensure you understand exactly how the outcome affects your reclaim potential.
Conclusion
The upcoming ECJ ruling in C-465/25 (Matin Maier v Romania) is set to address a critical and long-standing VAT question: can a taxpayer lose the right to recover VAT simply because a supplier’s VAT number was revoked or marked inactive?
The answer will have far-reaching consequences for VAT neutrality, cross-border refunds, administrative practices, and the way businesses manage supplier relationships.
Until the court issues its decision, the best strategy is to maintain robust documentation, continue good-faith compliance, and stay informed.
VAT IT will continue to monitor the case closely and provide guidance to help you navigate the complexities, turning potential VAT obstacles into opportunities for clarity and recovery.
