The GFD guidance clarifies that if a creditor’s receivable arose before the amendment’s effective date of 1 April 2019, but related insolvency proceedings began after the effective date, it will be necessary to proceed in accordance with the new measures.
Further, the guidance: Allows for the correction of the tax base for receivables included in the approved reorganisation plan, Includes rules for reporting of corrections in the creditors’ VAT returns and VAT ledger statements, Summarises the conclusions of the Court of Justice of the European Union (CJEU)—if both the creditor and the debtor were VAT payers at the time of a taxable supply, but the debtor ceased to be a VAT payer between the date of the supply and the date for a correction to the tax base for an unrecoverable debt, the creditor has the right to make a correction
Source KPMG
