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Modification of VAT taxable base: Condonation of debts and its impact on invoicing

  • The right to modify the taxable base of VAT is not lost by the debtor’s bankruptcy, even if exercised out of time.
  • However, the right to modify the taxable base is lost in the case of debt forgiveness.
  • The case analyzed involves a sports center that sued a developer for compensation for delays in the delivery of a construction project and damages resulting from poor execution.
  • The developer counterclaimed for the outstanding payment for the project.
  • The parties reached a settlement agreement, in which they agreed to reduce the price to be received by the developer.
  • As part of the agreement, the developer issued a corrective invoice, reducing the initially invoiced amount to the sports center and requesting a refund of the initially charged VAT.
  • The parties disagree on the reason for issuing the corrective invoice.
  • The Tax Administration argues that there is no legal reason for the corrective invoice as it represents debt forgiveness.
  • The sports center argues that the corrective invoice is justified due to non-payment by the obligated entity.
  • The National Court agrees with the Tax Administration, stating that debt forgiveness is not included among the reasons for modifying the taxable base according to Article 80 of the VAT Law.


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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