On 1 August 2025, the Court of Justice ruled in Határ Diszkont (C-427/23) that a retailer's fee for administering VAT refunds to non-EU travellers is subject to VAT.
The case
A Hungarian shop near the Serbian border sold goods to customers not resident in the EU, who exported them the same day. After export, the shop refunded the VAT and charged a fee of 15% of the amount refunded. It reported that income as exempt. The Hungarian tax authority disagreed.
The ruling
A separate service. Administering the refund is a supply of services that is distinct from, and independent of, the exempt supply of goods.
No exemption. The service does not fall within Article 146(1)(e) of the VAT Directive on services linked to exports, or within Article 135(1)(d).
No legitimate expectations. The authority could tax the service, although it had checked and accepted the returns for several years and had not told the company about a change in national law that used to list these services as exempt. An after-the-fact, non-binding reply from the authority did not change that.
Not net by default. A tax authority cannot treat the fees as net amounts excluding VAT where the supplier considered its service exempt and it is manifestly impossible to recover the VAT from the customers afterwards.
What to check
- Retailers and refund operators should charge VAT on these fees.
- If you have treated them as exempt, the VAT already sits inside what you collected, where you cannot recover it from the traveller. Calculate any correction on that basis.
- Accepted returns and informal replies from a tax authority are weak protection. Precise assurances are what counts.
mr. J. el Khalfioui LL.M.