The pending case C-465/25 (Matin Maier SRL) brings together two strands of EU VAT law that do not always comfortably coexist: the substantive right to deduct input VAT and the procedural guarantees afforded to taxpayers. While disputes about revoked VAT numbers are not new, this case stands out because it combines that issue with fundamental rights such as access to the administrative file and the right to a fair hearing. The Court of Justice is therefore not only asked to revisit the limits of VAT deduction, but also to assess how far tax authorities may go in restricting taxpayers’ procedural safeguards.

Facts and Circumstances

The dispute originates from a Romanian tax audit covering the years 2018 and 2019. Following the audit, Matin Maier SRL was assessed additional corporate income tax and VAT liabilities. The central issue concerned transactions with a supplier that had been classified as an “inactive taxpayer” under Romanian law. Despite the fact that the services were actually carried out and the supplier had fulfilled its tax obligations, the Romanian authorities denied the deductibility of the related expenses and input VAT.

Alongside this, the tax authorities challenged the VAT treatment of a real estate transaction, arguing that the reverse charge mechanism had not been correctly applied, even though the taxpayer later corrected the invoices. The procedural dimension of the case further intensified the dispute: during the administrative phase, the taxpayer was denied full access to the file, in particular to documents obtained through cross-checks with other parties, on the basis that these documents were allegedly irrelevant to the outcome.

At its core, the dispute revolves around whether a taxpayer acting in good faith can be penalised for circumstances beyond its control, namely the administrative status of its supplier. The Romanian tax authorities effectively imposed VAT liabilities while simultaneously denying the right to deduct, creating a situation in which VAT becomes a real cost rather than a neutral tax.

In parallel, the taxpayer argued that its rights of defence were infringed. The refusal to grant full access to the administrative file raised concerns about whether the taxpayer had been given a genuine opportunity to challenge the assessment and present its case effectively.

The Court Analysis and Key Questions for the CJEU

The Romanian court raised serious concerns as to whether these practices are compatible with EU law, particularly when viewed against the Charter of Fundamental Rights and established CJEU jurisprudence. It stressed that the right to good administration, together with the rights of the defence, requires a sufficient level of transparency in tax proceedings, which includes access to all relevant documents. Refusing such access on the basis that certain documents are considered irrelevant risks depriving the taxpayer of a meaningful opportunity to challenge the conclusions of the tax authorities.

From a substantive VAT perspective, the court also questioned whether the mere revocation of a supplier’s VAT number can, in itself, justify denying the right to deduct. Referring to earlier case law of the Court of Justice, it indicated that such a denial should only be justified where it is established that the taxpayer knew, or ought to have known, that it was involved in fraud. In that context, the court expressed particular concern that the Romanian approach effectively places an excessive burden on taxpayers, requiring them to verify the administrative status of their suppliers even where the underlying transactions are genuine and the tax has been properly accounted for.

Against this background, the national court decided to refer several questions to the Court of Justice, covering both procedural and substantive aspects. In essence, the Court is asked to clarify whether EU law permits tax authorities to limit access to the administrative file, whether decisions adopted in breach of procedural rights can nevertheless be upheld, and whether a taxpayer may be required to charge and remit VAT while being denied the corresponding right to deduct solely because a supplier’s VAT number has been revoked.

Why This Case Matters

The importance of C-465/25 lies in its potential to clarify the limits of Member States’ anti-fraud measures within the EU VAT system. If the Court were to accept that a revoked VAT number alone justifies denying a deduction, it would significantly shift the risk of supplier non-compliance onto customers, thereby undermining the principle of fiscal neutrality.

At the same time, the procedural aspects of the case could have far-reaching consequences for tax administration across the EU. A ruling that strengthens taxpayers’ rights to access the file and challenge evidence would reinforce the role of fundamental rights in tax proceedings, ensuring that efficiency in enforcement does not come at the expense of fairness.

Ultimately, this case goes beyond a technical VAT question. It addresses the balance between effective tax collection and the protection of legitimate expectations, legal certainty, and proportionality. The Court’s judgment will likely determine whether the current trajectory of stricter compliance requirements remains compatible with the foundational principles of EU VAT law.