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VAT refunds on irrecoverable debts - The deadline is expiring soon
In the FGSZ case in March 2021, a favorable decision has been made for taxpayers by the European Court of Justice. The ECJ ruled that the practice according to which reclaiming the VAT of irrecoverable debts may only be possible within the general limitation period (the limitation period for the right of tax assessment) is contrary to the VAT Directive. Experience has shown that usually several years pass between the date of performance of a transaction and the declaration of final irrecoverability in insolvency proceedings (e.g. liquidation).
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