- The European Court of Justice ruled on the Cityland vs Bulgarian Tax Administration case on April 3, 2025.
- The case challenges the practice of automatically removing VAT numbers by tax administrations in EU member states.
- The dispute involved the Bulgarian authorities’ decision to remove Cityland from the VAT register for not meeting tax obligations.
- Cityland argued that the non-payments were due to legitimate business difficulties, not fraudulent behavior.
- The company sought clarification on the compatibility of Bulgarian law with EU law.
- The court stated that EU VAT directives and principles do not allow automatic VAT deregistration for persistent non-compliance.
- National laws must assess the nature and severity of taxpayer behavior rather than allowing general deregistration without individual analysis.
- The decision emphasizes that VAT deregistration must be proportionate and case-specific, enhancing procedural protections for taxpayers.
- Member states have some discretion in tax measures but must adhere to fundamental EU law principles, including proportionality.
Source: easytax.co
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.
