German Court: Input VAT Deduction Must Be Adjusted After Import VAT Repayment in Insolvency

• The German Federal Fiscal Court clarified input VAT adjustment rules in insolvency cases.
• Repaying import VAT into an insolvency estate requires a mandatory adjustment of the input VAT deduction.
• Allowing a deduction without a corresponding tax burden would unfairly benefit the taxpayer and breach EU equal treatment principles.
• The refund in insolvency removes the tax burden, making correction of the deduction necessary.

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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