European Court of Justice Issues Preliminary Ruling on Slovenian VAT Reduction Rules for Debts

The European Court of Justice (ECJ) June 11 issued a preliminary ruling for Case No. C-146/19, stating that EU principles under the common VAT system prevent the Slovenian denial of a reduction of the VAT base for an insolvent company. A taxpayer filed for insolvency, and after the bankruptcy concluded a Slovenian tax agency audit revealed that the taxpayer hadn’t declared various claims during the bankruptcy proceedings. The tax agency denies VAT reductions when, after a transaction has been concluded, part or all of the consideration hasn’t been received by the taxable person due to an insolvent debtor. The ECJ ...