The Danfoss Case

A third party (P) who bears the burden of unlawfully levied tax paid by a supplier (T) to the State may be able to recover the tax from T or the State. The European Court of Justice in Danfoss A/S, Sauer-Danfoss ApS v Skatteministeriet (Case C-94/10) ruled that a defence raised by the State that P has no direct causal link because P did not pay the tax to the State would breach the principle of effectiveness.