ECJ C-182/20 Administraţia Judeţeană a Finanţelor Publice Suceava and Others vs. Romania (Questions): Input VAT deduction prior to insolvency proceedings

Subject matter of the dispute in the main proceedings
Application submitted by BE, a company which has been declared insolvent, and DT, a partner and administrator thereof, seeking revision of the judgment delivered in appeal proceedings by the Curtea de Apel Suceava (Court of Appeal, Suceava, Romania), by which that court upheld the decision of the tax authorities (Administrația Județeană a Finanțelor Publice Suceava) (District Directorate of Public Finances, Suceava, Romania) and the Direcția Generală Regională a Finanțelor Publice Iași (Regional Directorate General of Public Finances, Iași, Romania)) to adjust value added tax (VAT) in favour of the State, by refusing to deduct VAT on taxable transactions prior to the initiation of insolvency proceedings in relation to that company.

Subject and legal basis of the request for a preliminary ruling
An interpretation of Directive 2006/112/EC and the principles of fiscal neutrality, the right to deduct VAT and fiscal certainty, is requested pursuant to Article 267 TFEU.

Question referred
Do Directive 2006/112/EC and the principles of fiscal neutrality, the right to deduct VAT and fiscal certainty preclude, in circumstances such as those in the main proceedings, national legislation which requires, once insolvency proceedings in respect of an economic operator have been initiated, automatically and without further checks, adjustment of VAT, by refusing to allow the economic operator to deduct VAT on taxable transactions that occurred prior to the declaration of insolvency and ordering the operator to pay the deductible VAT?

Does the principle of proportionality preclude, in circumstances such as those in the main proceedings, such provisions of national law, given the economic consequences for the economic operator and the definitive nature of such an adjustment?

Source: Curia

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