The repayment of import VAT to an insolvency estate following an insolvency law challenge necessitates an input tax adjustment according to $\S 17(3)$ sentence 1 of the German VAT Act ($\text{UStG}$). The term “refunded” in this context is strictly defined as the actual repayment, irrespective of the initial payment’s legal basis. A taxpayer’s right to deduct input tax for import VAT is only valid if they had a legally enforceable obligation to pay it in the first place. The Federal Fiscal Court ($\text{BFH}$) ruled that the successful challenge and subsequent repayment of the import VAT does require an input tax adjustment, consequently dismissing the plaintiff’s claim and ordering them to bear the costs.
Source: bundesfinanzhof.de
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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