ECJ: VAT Bad Debt Relief Clarity for Taxpayers

• EU Court of Justice ruled that member states must provide VAT payers with the option of bad debt relief
• Decision is significant for countries like Bulgaria that haven’t implemented bad debt relief properly
• VAT becomes payable when invoice is issued, even if buyer doesn’t pay
• Article 90 of EU VAT Directive allows for refund of VAT in case of non-payment
• ECJ decision allows VAT payers to rely on EU VAT Directive in disputes with tax authorities
• Suppliers who haven’t received full payment should consider filing claims based on ECJ judgment
• Appeals against tax authorities may be successful if policies or practices are not in line with EU VAT rules.

Source: news.bloombergtax.com

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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