Enel Maritsa Iztok 3 AD: compound interest claims and legitimate expectation

The recent decision of the ECJ in Bulgarian case of Enel Maritsa Iztok 3AD v Direktor Obzhalvane i upravlenie na izpalnenieto NAP (12 May 2011 ECJ Case C-107/10) will be of interest to those involved in challenges to the prospective effect of the three year capping provisions introduced in 1996 (output tax) and 1997 (input tax) and to those involved in compound interest claims.

The facts

The basic facts are as follows:

• Enel made a VAT repayment claim in its monthly VAT return (ie claimed input tax exceeded declared output tax). Under Bulgarian law then in force the tax authority had to repay the excess VAT within 45 days.
• ...