CEDH · CASELAW;COMMUNICATEDCASES;ENG — 8 septembre 2025

.s800EAC49 { font-size:12pt } .s379BC09C { margin-top:36pt; margin-bottom:0pt; text-align:right } .sBB9EE52A { font-family:Arial } .s32563E28 { margin-top:0pt; margin-bottom:0pt } .s5E1364CA { margin-top:0pt; margin-bottom:12pt; text-align:center; page-break-inside:avoid; page-break-after:avoid; font-size:14pt } .s339D85E6 { margin-top:0pt; margin-bottom:14pt; text-align:center; page-break-inside:avoid; page-break-after:avoid } .s665E407E { margin-top:66pt; margin-bottom:14pt; text-align:center; page-break-inside:avoid; page-break-after:avoid } .s29100277 { font-family:Arial; font-weight:bold } .s10950C61 { margin-top:0pt; margin-bottom:0pt; text-indent:14.2pt; text-align:justify } .sA36B60A1 { font-family:Arial; font-style:italic } Published on 29 September 2025   SECOND SECTION Application no. 53744/20 US-CONSTRUCTION DOOEL KUMANOVO against North Macedonia lodged on 16 November 2020 communicated on 8 September 2025 SUBJECT MATTER OF THE CASE The application concerns administrative proceedings in which the applicant company was ordered to pay value-added tax (“VAT”) together with interest, which it had previously deducted from its tax obligation towards the State. On 12 May 2015 company P. issued an invoice to the applicant company in which it indicated the amount of the VAT to be paid. On 26 May 2015 the applicant company paid that amount of VAT. Subsequently it deducted the VAT amount in its accounting records for the year 2015. At the time when the invoice was issued, company P. had not been registered as a VAT payer. However, according to the applicant company, P. paid the amount of the VAT indicated in the abovementioned invoice into the State budget on 29 June 2015 and it was registered for VAT purposes as of 1   March 2016. From June to August 2016 the Internal Revenue Office (“the IRO”) conducted an audit of the applicant company’s accounting records for 2015. On 7   September 2016 it adopted a decision ordering the applicant company to pay the abovementioned VAT amount due to a reporting discrepancy. Namely, the invoice issued by company P. had not contained its VAT number, and moreover, at that time P. had not been registered for VAT purposes. After one remittal, the administrative courts at two levels confirmed the findings of the IRO. The courts noted that, according to section 35(1)(7) of the Value Added Tax Act, read together with section   55 of the same Act, a taxpayer had no right to a VAT deduction based on invoices issued by an entity not entitled to declare VAT. The applicant company complains under Article 1 of Protocol No. 1 to the Convention that the domestic authorities deprived it of the right to deduct the VAT which it had paid on account of an error committed by its supplier and that it was therefore burdened with paying the VAT twice. QUESTION TO THE PARTIES 1.     Did the applicant company have a “legitimate expectation”, within the meaning of Article 1 of Protocol No. 1 to the Convention, to deduct the VAT indicated in the invoice issued by company P. (see “Bulves” AD v.   Bulgaria , no. 3991/03, §§ 54-57, 22 January 2009)? In particular, was the applicant company sufficiently diligent in its business relations with company P. (ibid., § 57; Formela v. Poland , no.   31651/08, §§   96-102, 5   February 2019; and Immoreks Makedonija Doo Skopje v. North Macedonia (dec.), no. 25311/17, §§ 38-40, 24   September 2024)?   2.   Has there been a violation of the applicant company’s right to peaceful enjoyment of its possessions, within the meaning of Article 1 of Protocol   No.   1, on account of the refusal by the domestic authorities to recognise its right to a VAT reduction on the basis of the invoice issued by company P.? In particular, was the requirement for the applicant company to pay the VAT in issue necessary to secure the payment of taxes, was it in the general interest, and did it impose an excessive individual burden on the applicant company (see Euromak Metal Doo v. the former Yugoslav Republic of Macedonia , no.   68039/14, §§ 43-50, 14 June 2018; Business Support Centre v. Bulgaria , no. 6689/03, §§ 21-23, 18 March 2010; and “Bulves” AD , cited above, §§ 67-71)? The Court refers, in particular, to the applicant company’s argument that the amount of the VAT in issue was paid to the State budget by company P.