Comments on ECJ 314/22: Member state CAN limit the time for applying for VAT bad debt relief BUT it cannot be too burdensome for the taxpayer

• A Bulgarian taxpayer provided construction services and claimed overpayment of VAT plus interest in 2020, due to non-payment by the purchasers.
• The tax authority denied the correction, citing the expiry of the limitation period and unjustified overpayment.
• The court clarified that there can be a time limit for applying for bad debt relief, but it should not make exercising this right impossible or excessively difficult.
• The time limit starts from when the taxpayer was able to assert the right to a reduction.
• The taxpayer does not have to correct the invoice or inform the debtor to take advantage of bad debt relief, and is entitled to interest if a tax refund is not paid within a reasonable time.

Source Pawel Mikula

See also

• C-314/22 (Consortium Remi Group’ AD) – Judgment – Member states can impose a preclusion period for VAT refund requests due to non-payment

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