EU Court: VAT Bad Debt Relief Only for Original Creditor, Not Assignee – Mokoryte Case

Bad debt relief for VAT is only available to the original creditor who carried out the taxable transaction, not to an assignee of the receivable.
In the Mokoryte case, the subcontractor could not claim VAT relief after receiving an assigned receivable that later became irrecoverable.
The EU Court ruled that the right to adjust VAT is tied to the original taxable person and transaction, regardless of any assignment of receivables.
The subcontractor’s claim was denied because the original supply was to the contractor, not the developer who defaulted.
The Court emphasized that assignment of receivables does not transfer VAT adjustment rights under Article 90 of the VAT Directive.

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.