- A dispute arose between SEM Remont and the Bulgarian tax authority over the right to deduct VAT based on a protocol prepared by the supplier, Gidrostroy-Russia, for dredging works at the Port of Varna.
- The supplier, initially not VAT-registered in Bulgaria, issued invoices without VAT, later rectifying the situation by registering for VAT and creating a protocol to settle overdue VAT, but the tax authority rejected the deduction due to formal errors and the actual purchaser being a different entity.
- SEM Remont’s complaint led to the Administrative Court in Varna referring the matter to the CJEU, which emphasized that the right to deduct VAT depends on fulfilling substantive conditions such as VAT being due or paid, which was not the case here.
Source MDDP
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