Claiming a Second Input Tax Adjustment in Insolvency Proceedings: Legal Basis and Requirements

• In insolvency, input VAT deduction from unpaid supplies must be adjusted due to uncollectibility, regardless of the recipient’s tax method.
• If the supplier later receives payment (even partially) from the insolvency administrator, the input VAT deduction must be adjusted again in favor of the insolvency estate.
• The second VAT adjustment (refund) depends on a prior reduction of input VAT to the extent that the underlying claims were unpaid before the insolvency application was filed.

Source: datenbank.nwb.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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