- The EU General Court ruled that only the original supplier can reduce their VAT taxable amount for irrecoverable debts; this right does not transfer to subcontractors who acquire claims through assignment.
- VAT adjustments are personal to the original taxable person and do not extend to third-party assignees.
- Debt assignment structures cannot be used to shift VAT recovery rights.
- Subcontractors accepting assigned claims bear the economic risk of insolvency without VAT relief.
- Businesses must carefully structure transactions where payment risk exists, as VAT relief for non-payment is strictly confined to the original supplier.
Source: meridianglobalservices.com
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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