The Court implicitly rejected the AG’s suggestion that VAT amounts which are conveyed to a supplier by way of a set-off (as opposed to transmitting cash) are not “paid” for the purpose of input tax deduction where the recipient knew or should have known that the supplier does not have the means to remit the VAT to the authorities. It therefore seems that the Court agrees with the view that any act being good enough to constitute “consideration” for art 73 will also be good enough to qualify as “VAT paid” for art 168.
Source Fabian Barth
See also ECJ C-227/21 (HA.EN.) – Judgment – No Denial of input VAT if the seller would not pay output VAT
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