Added Feb 27, 2025
- The Court of Justice of the EU ruled that Bulgaria can lawfully refuse the deduction of input VAT when the service provider, Gidrostroy, is not registered for VAT purposes in Bulgaria and does not indicate VAT on the invoices.
- Gidrostroy, a Russian company, carried out dredging work for the Bulgarian company SEM Remont EOOD but only fulfilled its VAT obligations after a tax audit, leading to the Bulgarian tax authority’s refusal to allow the VAT deduction.
- The court emphasized that the circumstances surrounding the tax audit and the protocol in which Gidrostroy was identified as both the supplier and the recipient of the services are relevant for assessing the deductibility of VAT.
Source Taxlive
Added Jan 27, 2025
- ECJ case clarifies VAT deduction rules for Bulgarian taxpayers
- Case involved Bulgarian construction company and interpretation of Council Directive 2006/112/EC
- Background: company entered contract with Russian supplier not registered for VAT in Bulgaria
- Taxpayer claimed VAT deduction using supplier’s invoices issued before registration
- Bulgarian tax authorities denied deduction, stating invoices were invalid
- Taxpayer appealed, arguing denial violated Directive and neutrality principle
- ECJ ruling: National legislation can deny VAT deductions if supplier not registered before issuing invoices
- Member state laws can prohibit VAT invoice corrections during tax audit
Source: globalvatcompliance.com
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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.
