- The taxpayer in the telecoms sector deducted VAT on various capital goods, including mobile communication devices and equipment necessary for providing services. Some goods were written off due to wear and tear, defects, or obsolescence, and were sold as waste with VAT added.
- The taxpayer later repaid the input tax claimed on these goods but was denied a repayment claim, leading to an appeal on whether an adjustment was required under Article 185 of the VAT Directive.
- The Court determined that the sale of waste does not affect the right to deduct, as long as the goods were used in economic activities subject to VAT.
- The Court also noted that destruction of goods does not require an adjustment obligation if it is duly proved or confirmed and the goods had lost all usefulness in the taxable person’s economic activities. The proven disposal of goods is treated the same as destruction if it entails the irreversible disappearance of the goods.
Source KPMG
See also
- Summary of ECJ C-127/22: No Adjustment of deductible VAT if he destruction is duly proven and the goods had objectively lost all usefulness in the taxable person’s economic activities
- C-127/22 (Balgarska telekomunikatsionna kompania) – Judgment – No Adjustment of VAT deductions if scrapping of goods is duly proven
- Roadtrip through ECJ Cases – Adjustment of deductions – Recalculation (Art. 184 – 186)
