VAT Implications for Supplier When Goods Are Destroyed During Transit and Compensation Is Received

• The date of VAT liability is considered the date the supplier begins transferring the goods for delivery to the buyer.
• If the goods are destroyed during transportation and the supplier receives compensation for the loss, VAT liability does not arise.
• The tax authorities require the supplier to issue a tax invoice and recognize VAT liability on the date of shipment, treating it as the start of the transfer of ownership.
• If ownership of the goods had not yet passed to the buyer at the time of loss, logically, VAT liability should not arise, but the tax authorities take a fiscal approach and require VAT to be recognized at shipment.

Source: news.dtkt.ua

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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