Jugment of the Court of Justice of the EU in Case C 127/18, A-PACK CZ s.r.o.: Correction of the Value Added Tax when the Debtor (Subject of Insolvency Proceedings) is no Longer Taxable Person (8 May 2019)

The Court decided that the Czech VAT legislation is not in accordance with the EU VAT legislation, which provides that a taxable person cannot correct the value added tax (VAT) taxable amount (and VAT), in the case of total or partial non-payment, by its debtor, of a sum due in respect of a transaction subject to that tax, if the debtor is no longer a taxable person for the purposes of VAT.

Based on this judgement it can be concluded that also the provisions of the new Czech VAT Amendment 2019 (in force as of 1 April 2019), which provide that a debtor (subject of insolvency proceedings) must be registered for VAT as the condition for the correction VATable base and VAT, is contrary to EU VAT law.

The full judgement can be found at: http://curia.europa.eu/juris/document/document.jsf?text=&docid=213864&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=7487705

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