European General Court Issues Preliminary Ruling on VAT Treatment of Assigned Irrecoverable Construction Claims

The European General Court (EGC) April 22 issued a preliminary ruling for Case No. T-233/25, on the VAT treatment of assigned irrecoverable claims arising from construction contracts. The taxpayer, a Romanian subcontractor, sought a VAT refund after acquiring, by assignment, a contractor’s irrecoverable claim against an insolvent developer, relying on Article 90 of EU Directive 2006/112/EC. Upon request for a preliminary ruling, the EGC held that EU Directive 2006/112/EC must be interpreted as meaning that: 1) the VAT-taxable amount may be reduced only by the taxable person that supplied the goods or services and was liable for VAT at the ...