C-314/22 Consortium Remi Group

JUDGMENT OF THE COURT (Tenth Chamber)

29 February 2024 ( *1 )

(Reference for a preliminary ruling – Common system of value added tax (VAT) – Directive 2006/112/EC – Derogation provided for in Article 90(2) – Taxable amount – Reduction of the taxable amount – Total or partial non-payment of the price – Limitation period regarding applications for a subsequent reduction in the taxable amount of VAT – Date from which the limitation period begins to run – Taxable person’s entitlement to interest)

In Case C‑314/22,

REQUEST for a preliminary ruling under Article 267 TFEU from the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria), made by decision of 4 May 2022, received at the Court on 11 May 2022, in the proceedings

‘Consortium Remi Group’ AD

v

Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite,

THE COURT (Tenth Chamber),

composed of Z. Csehi (Rapporteur), President of the Chamber, M. Ilešič and D. Gratsias, Judges,

Advocate General: J. Kokott,

Registrar: R. Stefanova‑Kamisheva, Administrator,

having regard to the written procedure and further to the hearing on 12 May 2023,

after considering the observations submitted on behalf of:

the Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite, by M. Koleva and S. Petkov,

the Bulgarian Government, by T. Mitova, acting as Agent,

the European Commission, by D. Drambozova and J. Jokubauskaitė, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 7 September 2023,

gives the following

Judgment

Legal context and the dispute

1This request for a preliminary ruling concerns, in particular, the interpretation of Article 90 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’).

2The request has been made in proceedings between ‘Consortium Remi Group’ AD and the Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ – Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite (Director of the Varna ‘Tax and Social Security Appeals and Practice Board’ of the National Public Revenue Agency, Bulgaria) (‘the Director’) concerning the Director’s refusal to grant Consortium Remi Group an adjustment of the amount of value added tax (VAT) paid by it in respect of the unpaid debts of its debtors.

Legal context

European Union law

The Act of Accession of the Republic of Bulgaria to the European Union

3Article 2 of the Act concerning the conditions of accession of the Republic of Bulgaria and Romania and the adjustments to the Treaties on which the European Union is founded (OJ 2005 L 157, p. 203) provides:

‘From the date of accession, the provisions of the original Treaties and the acts adopted by the institutions and the European Central Bank before accession shall be binding on Bulgaria and Romania and shall apply in those States under the conditions laid down in those Treaties and in this Act.’

The VAT Directive

4Article 63 of the VAT Directive provides:

‘The chargeable event shall occur and VAT shall become chargeable when the goods or the services are supplied.’

5Article 73 of that directive provides:

‘In respect of the supply of goods or services, other than as referred to in Articles 74 to 77, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.’

6Article 90 of that directive is worded as follows:

‘1. In the case of cancellation, refusal or total or partial non-payment, or where the price is reduced after the supply takes place, the taxable amount shall be reduced accordingly under conditions which shall be determined by the Member States.

2. In the case of total or partial non-payment, Member States may derogate from paragraph 1.’

7Article 185 of that directive provides:

‘1. Adjustment shall, in particular, be made where, after the VAT return is made, some change occurs in the factors used to determine the amount to be deducted, for example where purchases are cancelled or price reductions are obtained.

2. By way of derogation from paragraph 1, no adjustment shall be made in the case of transactions remaining totally or partially unpaid or in the case of destruction, loss or theft of property duly proved or confirmed, or in the case of goods reserved for the purpose of making gifts of small value or of giving samples, as referred to in Article 16.

However, in the case of transactions remaining totally or partially unpaid or in the case of theft, Member States may require adjustment to be made.’

8The first paragraph of Article 273 of the VAT Directive provides:

‘Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.’

Bulgarian law

9Article 115 of the zakon za danak varhu dobavenata stoynos (Law on value added tax, DV No 63 of 4 August 2006), that entered into force on 1 January 2007, in the version applicable to the dispute in the main proceedings (‘the ZDDS’), states:

‘(1) In the event of a change in the taxable amount or cancellation of a transaction for which an invoice has been issued, the supplier shall be obliged to draw up a note relating to the invoice.

(2) … The note shall be issued within five days of the event referred to in paragraph 1 and, where it concerns a supply in respect of which an invoice has been issued showing the VAT invoiced on payment of a deposit, within five days of the date of reimbursement, set off, or other non-gratuitous payment of the amount of the stipulated deposit, and shall relate to the amount of the reimbursement, set off or other non-gratuitous payment.

(3) In the event of an increase in the taxable amount, a debit note shall be raised; in the event of a reduction in the taxable amount or cancellation of a transaction, a credit note shall be issued.

(4) In addition to the matters referred to in Article 114, a note relating to an invoice must state:

1the number and date of the invoice in respect of which it is issued;

2the reason for issuing it;

(5) Notes must be issued at least in duplicate; one copy for the supplier and one for the person to whom the supply is made.

…

(7) … A note relating to an invoice need not state the matters required by Article 114(1)(12), (14) and (15) unless the place of performance of the transaction to which it relates is in the territory of a Member State, or unless it relates to an intra-Community transaction or distance sale of goods.’

10Article 116 of the ZDDS is worded as follows:

‘(1) It is not permissible to make amendments or additions to invoices or notes relating to invoices. Documents which have been incorrectly drawn up or amended must be cancelled and reissued.

(2) Issued invoices and notes relating to such invoices which ought to show VAT, but do not do so, shall also be regarded as documents which have been incorrectly drawn up.

(3) Issued invoices and notes relating to such invoices which ought not to show VAT, but do so, shall also be regarded as documents which have been incorrectly drawn up.

(4) Where documents which have been incorrectly drawn up or amended have been entered in the books of account of the supplier or the person to whom the supply is made, their cancellation requires a memorandum to be drawn up by each party, in which the following must appear:

1the reason for cancellation;

2the number and date of the cancelled document;

3the number and date of issue of the new document;

4the signatures of those who have drawn up the memorandum on behalf of each party.

(5) All the copies of the cancelled documents shall be kept by the issuer and they shall be entered in the accounts of the supplier and the person to whom the supply is made in accordance with the regulation implementing the present law.’

11Article 128(1) of the Danachno-osiguritelnia protsesualen kodeks (Tax and Social Security Procedural Code) (DV No 105 of 29 December 2005), in force since 1 January 2006 (‘the DOPK’), in the version applicable to the dispute in the main proceedings, provides:

‘Sums unduly paid or collected in respect of taxes, compulsory social security contributions, fines or financial penalties imposed by the revenue departments, as well as sums reimbursable by [the Natsionalnata agentsia za prihodite (the National Revenue Agency)] under tax or social security legislation, shall be set off by the revenue departments against the payable public debts which are collected by the National Revenue Agency. A time-barred debt can be set off where the debtor’s credit became payable before his debt became time-barred.’

12Article 129 of the DOPK states:

‘(1) Set off or reimbursement may be effected on the initiative of the tax authorities or on the written request of the person concerned. A request for set off or reimbursement shall be considered if it is submitted within five years from 1 January of the year in which the event giving rise to the reimbursement occurred, unless the law provides otherwise.

…

(3) … Notice of set off or reimbursement must be issued within 30 days of receipt of the request, if no review is ordered before expiry of that period. Liabilities comprised of tax or compulsory social security contributions are open to review even in cases of set off or reimbursement, including cases where a notice under the first sentence is the subject of an action or appeal. If the notice is the subject of an action before the courts, a notice of adjustment may be issued at any time until the judicial decision takes effect.

…

(7) An appeal shall lie in respect of a notice of set off or reimbursement in accordance with the rules governing appeals against notices of adjustment.’

13Article 110 of the zakon za zadalzheniyata i dogovorite (Law on Obligations and Contracts) (DV No 275 of 22 November 1950), in the version applicable to the dispute in the main proceedings (‘the ZZD’), provides:

‘The passage of a limitation period of five years leads to the extinction of any debt for which the law doesn’t provide otherwise.

…’

14Article 116 of the ZZD states:

‘The limitation period stops running:

when the debtor recognises the debt;

by the bringing of an action or the lodging of an objection or a request for conciliation; if the action, objection or request for conciliation is not granted, the limitation period is deemed to have not been suspended;

by adopting enforcement proceedings.

…’

15Article 117 of the ZZD is worded as follows:

‘From the interruption of the limitation period, a new limitation period starts to run.

If the debt was determined by a judicial decision, the new limitation period is five years in all cases.

…’

16Article 120 of the ZZD provides:

‘The rule on limitation does not apply automatically.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

17Consortium Remi Group is engaged in the construction of buildings and facilities. It was registered for VAT purposes on 16 June 1995 and was deregistered on 7 March 2019 on account of a systematic failure to fulfil its obligations under the ZDDS. By judgment of 18 September 2020, the Okrazhen sad Varna (Regional Court, Varna, Bulgaria), declared Consortium Remi Group insolvent and insolvency proceedings were opened.

18In respect of the period from 2006 to 2010 and in respect of 2012, Consortium Remi Group sent invoices to five companies, namely ‘Promes’ OOD, ‘Orkid Sofia Hills’ EOOD, ‘Valentin Stoyanov’ EOOD, ‘Sunshine Coast Investment’ EOOD and ‘Mosstroy-Varna’ AD (‘the debtor companies’). Those invoices indicated the VAT and, in respect of most of the VAT periods, the VAT was paid. Nonetheless, on account of the failure by the debtor companies to pay those invoices, the total amount of the debts of Consortium Remi Group concerning the VAT relating to those invoices amounts to 618 171.16 Bulgarian leva (BGN) (approximately EUR 309085).

19By a tax assessment notice of 31 January 2011, Consortium Remi Group’s liabilities under the ZDDS were established, for the period from 1 January 2007 to 31 July 2010, which included the VAT referred to in the invoices sent to Sunshine Coast Investment. Consortium Remi Group brought legal proceedings challenging that notice but its action was dismissed by the court of first instance, whose decision was confirmed by a judgment of the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria).

20By an application of 7 February 2020, submitted pursuant to Article 129(1) of the DOPK (‘the application for set-off’), Consortium Remi Group sought from the Bulgarian tax administration, on the basis of Article 128(1) of the DOPK, a set-off of its VAT liabilities in the amount of BGN 618 171.16 together with interest for late payment, which equated to the VAT declared and paid in respect of the invoices sent to the debtor companies. In the annex to its application for set-off, Consortium Remi Group submitted a ‘list of the amounts unpaid by the counterparties’.

21That application was, however, rejected on the ground that it had been submitted after the expiry of the limitation period laid down in Article 129(1) of the DOPK. In addition, it was found that Consortium Remi Group had not adduced evidence of a total or partial non-payment of the debts concerning the VAT invoiced to the debtor companies.

22During the administrative appeal of the decision that rejected that application, Consortium Remi Group submitted decisions initiating insolvency proceedings adopted concerning the debtor companies as well as evidence showing that those debts had been accepted by the liquidators of the debtor companies and that they were contained in the schedules of claims accepted drawn up in the context of the insolvency proceedings.

23The decision to reject the application for set-off was confirmed in its entirety by a decision adopted on 22 May 2020 by the Director.

24Consortium Remi Group brought an action before the Administrativen sad Varna (Administrative Court, Varna, Bulgaria) directed against the decision rejecting the application for set-off, confirmed by the Director, which that court rejected. It brought an appeal on a point of law against that judgment before the Varhoven administrativen sad (Supreme Administrative Court), which is the referring court, submitting that, in accordance with Article 90(1) of the VAT Directive, the taxable amount for VAT purposes should be reduced in cases where the taxable person did not receive all or part of the consideration due following the delivery of goods or supply of services that were made, and that that provision has direct effect and should therefore be applied where the national provisions infringe it.

25The referring court states that Bulgarian law makes no provision for a reduction in the taxable amount of VAT in the case of non-payment, Article 115 of the ZDDS providing for such a reduction only in the event of termination of a transaction.

26Relying on the reasoning of the Court in the judgments of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraphs 21 to 27), and of 3 July 2019, UniCredit Leasing (C‑242/18, EU:C:2019:558, paragraphs 62 and 65), the referring court considers that, as Consortium Remi Group maintains, the possibility of refunding VAT in the event of non-payment of the price cannot be totally excluded, notwithstanding the derogation provided for in Article 90(2) of the VAT Directive. That is the case, in particular, where the taxable person proves that, in view of the circumstances, the obligation to pay an invoice, on the part of the recipient of that invoice, is unlikely to be fulfilled.

27According to the referring court, the derogation provided for in Article 90(2) of that directive was not taken into account in specific legislation in Bulgaria, both in so far as the manner in which the tax base is adjusted where the obligation to pay a VAT debt is not likely to be fulfilled and with regard to the conditions in which the refunding of the VAT paid may be requested.

28In those circumstances, the Varhoven administrativen sad (Supreme Administrative Court) decided to stay proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

In the event of a derogation in accordance with Article 90(2) of the VAT Directive, do the principle of neutrality and Article 90 of that directive allow a provision of national law such as the second sentence of Article 129(1) of the [DOPK], which provides for a limitation period for the submission of an application for a set-off or refund of the tax charged by the taxable entity in respect of the supply of goods or services in the event of total or partial non-payment by the recipient of the supply?

Irrespective of the answer to the first question, in the circumstances of the main proceedings, is it a necessary condition for the recognition of the right to a reduction in the taxable amount under Article 90(1) of the VAT Directive that the taxable entity corrects the invoice which it has issued, as regards the VAT charged, on account of total or partial non-payment by the recipient of the price of the supply under the invoice, before submitting the application for a refund?

Depending on the answers to the first two questions: How must Article 90(1) of the VAT Directive be interpreted when determining the time at which the ground for a reduction of the taxable amount arises in the event of total or partial non-payment of the price where there is no national provision in place on account of a derogation from Article 90(1)?

How must the reasoning in the judgments of [23] November 2017, … Di Maura (C‑246/16, EU:C:2017:887, paragraphs 21 to 27), and of 3 July 2019, UniCredit Leasing (C‑242/18, EU:C:2019:558, paragraphs 62 and 65) be applied if Bulgarian law does not contain any specific conditions for the application of the derogation under Article 90(2) of the VAT Directive?

Are the principle of neutrality and Article 90 of the VAT Directive consistent with a tax and insurance practice under which, in the event of non-payment, no correction of the tax charged is permitted until the recipient of the supplies or services – provided that the recipient is a taxable entity – has been notified of the cancellation of the tax, so that the deduction initially made by the recipient is corrected?

Does the interpretation of Article 90(1) of the [VAT Directive] permit the assumption that a possible right to a reduction of the taxable amount in the event of total or partial non-payment gives rise to a right to a refund of the VAT paid by the supplier, plus interest for late payment, and from what point in time?’

The jurisdiction of the Court

29According to settled case-law, the Court has jurisdiction to interpret EU law only as regards its application in a new Member State with effect from the date of that State’s accession to the European Union (judgement of 17 December 2020, FRANCK, C‑801/19, EU:C:2020:1049, paragraph 16 and the case-law cited).

30It follows, in particular, that the Court is not competent to interpret EU directives relating to VAT where the recovery of taxes at issue in the main proceedings pre-dates the accession of the Member State concerned to the European Union (judgment of 3 July 2019, UniCredit Leasing, C‑242/18, EU:C:2019:558, paragraph 31).

31Since the obligation to adjust is inextricably linked to the chargeability of the VAT due or paid as input tax and the right to deduct resulting therefrom, the appearance, after the accession of a Member State to the European Union, of factors which are, in principle, capable of justifying this requirement does not allow the Court to interpret the VAT Directive if the supply of goods or services is made before that accession (judgment of 27 June 2018, Varna Holideis, C‑364/17, EU:C:2018:500, paragraph 31).

32In the present case, the dispute in the main proceedings relates to the taxable periods for VAT purposes in respect of the years 2006 to 2010 and in respect of the year 2012. Accordingly, the Court has no jurisdiction to rule on the questions referred for a preliminary ruling in so far as they concern the supplies of goods or services that took place in 2006, occurring before the accession of the Republic of Bulgaria, on 1 January 2007, to the European Union.

Consideration of the questions referred

The first, third and fourth questions

33By way of a preliminary observation, it should be pointed out that, in order to provide a useful answer to the referring court, the Court of Justice may deem it necessary to consider provisions of EU law to which the national court has not referred in its questions, in particular by extracting from the statement of grounds in the order for reference the elements of EU law which, having regard to the subject matter of the dispute, require interpretation (judgment of 2 March 2023, Åklagarmyndigheten, C‑666/21, EU:C:2023:149, paragraph 22 and the case-law cited).

34In the present case, whilst, in the wording of the questions referred for a preliminary ruling, the referring court only made reference to the principle of fiscal neutrality, that factor does not prevent the consideration of other general principles of EU law that may be relevant in dealing with those questions.

35Accordingly, it should be considered that, by its first, third and fourth questions, which it is necessary to examine together, the referring court asks, in essence, whether, taking into account the derogation provided for in Article 90(2) of the VAT Directive, Article 90(1) of that directive, read in conjunction with the principles of fiscal neutrality, proportionality and effectiveness, must be interpreted as precluding legislation of a Member State which provides for a limitation period to apply for a VAT refund resulting from a reduction in the taxable amount of VAT in the event of total or partial non-payment of an invoice issued by a taxable person, and, if not, from which date such a limitation period must begin to run, in the absence of specific national provisions in that regard.

36It should be recalled that Article 90(1) of the VAT Directive provides that, in the case of cancellation, refusal or total or partial non-payment, or where the price is reduced after the supply takes place, the taxable amount is to be reduced accordingly under conditions which are to be determined by the Member States. That provision requires the Member States to reduce the taxable amount for VAT purposes and, consequently, the amount of VAT payable by the taxable person whenever, after a transaction has been concluded, part or all of the consideration has not been received by the taxable person. That provision embodies one of the fundamental principles of the VAT Directive, according to which the taxable amount is the consideration actually received and the corollary of which is that the tax authorities may not collect an amount of VAT exceeding the tax which the taxable person received (judgment of 11 November 2021, ELVOSPOL, C‑398/20, EU:C:2021:911, paragraphs 24 and the 25).

37Article 90(2) of the VAT Directive, for its part, provides that, in the case of total or partial non-payment of consideration, Member States may derogate from the obligation to reduce the taxable amount for VAT purposes provided for in Article 90(1) of that directive.

38In that regard, the Court has already held that a national provision which, in setting out the situations in which the taxable amount is reduced, does not refer to the situation of non-payment of the transaction price must be regarded as the result of the exercise by the Member State of the power of derogation granted it under Article 90(2) of the VAT Directive (judgment of 3 July 2019, UniCredit Leasing, C‑242/18, EU:C:2019:558, paragraph 60 and the case-law cited).

39In the present case, it follows from both the order for reference and the oral observations of the Bulgarian Government that the national legislation, setting out in Article 115(1) of the ZDDS the situations in which the tax base is corrected, does not provide for any correction in the event of non-payment of the price of the transaction subject to VAT.

40Accordingly, as regards the period at issue in the main proceedings, the Republic of Bulgaria must be regarded as having exercised its power to derogate from the obligation to reduce the taxable amount in the event of non-payment, with the result that the taxable person cannot rely on such a right (see, to that effect, judgment of 3 July 2019, UniCredit Leasing, C‑242/18, EU:C:2019:558, paragraph 61).

41Nevertheless, according to settled case-law of the Court, that option to derogate, which is strictly limited to situations of total or partial non-payment, is based on the notion that, in certain circumstances and because of the legal situation prevailing in the Member State concerned, non-payment of consideration may be difficult to establish or may only be temporary (judgment of 11 November 2021, ELVOSPOL, C‑398/20, EU:C:2021:911, paragraph 27 and the case-law cited).

42It follows that the exercise of that option to derogate must be justified if the measures taken by the Member States for its implementation are not to undermine the objective of fiscal harmonisation pursued by the VAT Directive, and it cannot allow the Member States to exclude altogether reduction of the taxable amount for VAT purposes in the event of non-payment (judgment of 11 November 2021, ELVOSPOL, C‑398/20, EU:C:2021:911, paragraph 28 and the case-law cited).

43Indeed, to accept that it is possible for Member States to exclude any reduction of the taxable amount for VAT purposes in the event of definitive non-payment would run counter to the principle of the neutrality of VAT, which means, inter alia, that the trader, as tax collector on behalf of the State, is entirely to be relieved of the burden of tax due or paid in the course of its economic activities which are themselves subject to VAT (judgment of 11 November 2021, ELVOSPOL, C‑398/20, EU:C:2021:911, paragraph 31 and the case-law cited).

44In that regard, it should be recalled that, first, Article 90(1) of the VAT Directive fulfils the conditions for it to have direct effect (judgment of 15 October 2020, E. (VAT – Reduction of the taxable amount), C‑335/19, EU:C:2020:829, paragraph 51 and the case-law cited) and, secondly, the option of derogation provided for in paragraph 2 of that article is intended only to enable Member States to counteract the uncertainty associated with recovery of the sums owed and does not resolve the question whether the taxable amount for VAT purposes may not be reduced in the case of definitive non-payment (judgment of 11 June 2020, SCT, C‑146/19, EU:C:2020:464, paragraph 24 and the case-law cited).

45Moreover, as the Advocate General observed, in essence, in points 41 and 56 of her Opinion, Article 90(1) of the VAT Directive may be directly applicable where the Member State, as in the present case, does not allow any reduction of the taxable amount in the event of total or partial non-payment without taking into account the degree of uncertainty as to the definite non-payment.

46As regards the temporal limit on the right to reduction of the taxable amount referred to in Article 90 of that directive, it must be noted, in the first place, that it follows from the case-law of the Court that the possibility of applying for the refund of VAT without any temporal limit would be contrary to the principle of legal certainty, which requires that the tax position of the taxable person, having regard to its rights and obligations vis-à-vis the tax authority, not be open to challenge indefinitely (see, to that effect, order of 3 March 2021, FGSZ, C‑507/20, EU:C:2021:157, paragraph 23 and the case-law cited).

47Furthermore, the Court has ruled, regarding the VAT deduction scheme, which the Court held must be interpreted consistently with Article 90 of the VAT Directive (see, to that effect, judgment of 22 February 2018, T‑2, C‑396/16, EU:C:2018:109, paragraph 35), that a limitation period the expiry of which has the effect of penalising a taxable person who has not been sufficiently diligent and has failed to claim deduction of the input VAT, by making it forfeit its right to deduct VAT, cannot be regarded as incompatible with the regime established by the VAT Directive, in so far as, first, that limitation period applies in the same way to analogous rights in tax matters founded on domestic law and to those founded on EU law (principle of equivalence) and, second, that it does not in practice render impossible or excessively difficult the exercise of the right to deduct VAT (principle of effectiveness) (judgment of 12 April 2018, Biosafe – Indústria de Reciclagens, C‑8/17, EU:C:2018:249, paragraph 37 and the case-law cited).

48Accordingly, as regards the national legislation at issue in the main proceedings, which sets a limitation period following the expiry of which the application for a tax refund is inadmissible, it is sufficient to note, as did the Advocate General in point 44 of her Opinion, that Article 90(1) of the VAT Directive does not preclude such a temporal limit on the right to a reduction of the taxable amount.

49In the second place, while the existence of a limitation period, the expiry of which results in a creditor no longer being able to apply for a reduction in the taxable amount of VAT in respect of certain claims, cannot in itself be regarded as incompatible with the VAT Directive, the determination of the date from which that period begins to run is a matter for national law, subject to compliance with the principles of equivalence and effectiveness (see, to that effect, order of 3 March 2021, FGSZ, C‑507/20, EU:C:2021:157, paragraph 23 and the case-law cited).

50With regard to, more specifically, the principle of effectiveness, it may be deduced from the case-law of the Court that a limitation period which began to run from the date of issue of the initial invoices and expired, for certain transactions, before the application for set off was submitted cannot validly preclude the exercise of the right to reduce VAT if the taxable person has not shown a lack of diligence, and in the absence of abuse or fraudulent collusion (see, to that effect, order of 3 March 2021, FGSZ, C‑507/20, EU:C:2021:157, paragraph 25 and the case-law cited).

51In that regard, it should be held, as the Advocate General also observed in point 50 of her Opinion, that, having regard to the principle of the neutrality of VAT, from which it stems that the trader, who pre-finances the VAT by collecting it on behalf of the State, is to be relieved entirely of the burden of the tax in the course of its economic activities subject to VAT, the starting point of the limitation period for the exercise of the right to a reduction of the taxable amount, under Article 90(1) of the VAT Directive, must have a sufficient link with the date from which the taxable person, acting in a diligent manner, may avail itself of that right.

52Moreover, in the absence of national provisions concerning the rules governing the exercise of the right to a reduction of the taxable amount in the event of total or partial non-payment, as in the dispute in the main proceedings, the principles of proportionality and legal certainty require that the starting point for such a limitation period is identifiable by the taxable person with a reasonable degree of probability.

53It must be stated, in that regard, that the uncertainty as to definitive non-payment could also be taken into account by granting the reduction of the VAT taxable amount when the creditor demonstrates, before the outcome of the insolvency or winding up proceedings of its debtor, a reasonable probability that the debt will not be honoured, even if that taxable base is re-evaluated upwards in the event that payment nonetheless occurs. It would thus be for the national authorities to determine, with due regard to the principle of proportionality and subject to review by the courts, the evidence for a probable extended period of non-payment to be provided by the creditor, according to the specific features of the applicable national law. Such a rule would be an equally effective means of attaining the objective pursued, while being less onerous for the creditor, who pre-finances the VAT by collecting it on behalf of the State (judgment of 15 October 2020, E. (VAT – Reduction of the taxable amount), C‑335/19, EU:C:2020:829, paragraph 48 and the case-law cited).

54That finding applies a fortiori in the context of insolvency or winding-up proceedings, in which the certainty that the debt is definitively irrecoverable can, in principle, be established only after a lengthy period. Such a period is, in any event, such as to inflict on traders subject to the legislation providing for such proceedings, when they are confronted with non-payment of an invoice, a cash-flow disadvantage compared to their competitors in other Member States, which would clearly undermine the objective of fiscal harmonisation pursued by the VAT Directive (see, to that effect, judgment of 15 October 2020, E. (VAT – Reduction of the taxable amount), C‑335/19, EU:C:2020:829, paragraph 50 and the case-law cited).

55In the present case, while the supplies of goods and services at issue in the main proceedings were made during 2007 to 2010 and in 2012, Consortium Remi Group only applied for a VAT refund resulting from the reduction in the taxable amount of VAT in 2020. It is apparent both from the documents of the file before the Court and the answers of the parties to the main proceedings to the questions raised during the hearing that, among the debtor companies, the first two had been deregistered from the companies register before the date on which the application was made, respectively in 2012 and in 2017, the third was deregistered during the procedure at issue in the main proceedings and, lastly, the final two are subject to insolvency proceedings opened before the application was made.

56Consequently, it is for the referring court, which alone has jurisdiction to rule on the facts, to ascertain the date from which Consortium Remi Group could, without showing a lack of diligence, assert its right to a reduction of the taxable amount in the event of total or partial non-payment, in particular having regard to the potentially irrecoverable nature of its debts.

57In the light of all of the foregoing considerations, the answer to the first, third and fourth questions is that Article 90 of the VAT Directive, read in conjunction with the principles of fiscal neutrality, proportionality and effectiveness, must be interpreted as not precluding legislation of a Member State which provides for a limitation period to apply for a VAT refund resulting from a reduction in the taxable amount of VAT in the event of total or partial non-payment, the expiry of which results in penalising an insufficiently diligent taxable person, provided that that limitation period only begins to run from the date on which that taxable person was able, without showing a lack of diligence, to assert its right to a reduction. In the absence of national provisions concerning the rules governing the exercise of that right, the starting point for such a limitation period must be identifiable by the taxable person with a reasonable degree of probability.

The second and fifth questions referred

58Having regard to the case-law recalled in paragraph 33 of the present judgment, it should be understood that, by its second and fifth questions, which it is necessary to examine together, the referring court asks, in essence, whether Article 90(1) and Article 273 of the VAT Directive, read in conjunction with the principles of fiscal neutrality and proportionality, must be interpreted as precluding, in the absence of specific national provisions, a requirement on the part of the tax authority which renders the reduction in the taxable amount of VAT, in the event of total or partial non-payment of an invoice issued by a taxable person, subject to the condition that that taxable person corrects the initial invoice beforehand and that it communicates beforehand to its debtor, provided that that debtor is a taxable person, its intention to cancel the VAT.

59As a preliminary point, so far as concerns the condition which renders the reduction in the taxable amount of VAT subject to the fact that the taxable person has corrected the invoices initially issued, it must be noted that, contrary to the argument put forward by the Director and the European Commission, such a condition does not stem from Article 203 of the VAT Directive.

60According to the case-law of the Court, that provision applies only where the VAT was incorrectly invoiced and, therefore, does not cover situations in which the tax stated on the invoice is correct (see, to that effect, judgment of 8 December 2022, Finanzamt Österreich (Wrongly invoiced VAT to final consumers), C‑378/21, EU:C:2022:968, paragraphs 21 and 23).

61On the other hand, both a requirement to correct the initial invoice and a requirement which makes the corresponding reduction of the taxable amount of a taxable person contingent, in the case of non-payment, on that person giving prior notice to its debtor, if the latter is a taxable person, of its intention to cancel a part or all of the VAT, falls within the scope of both Article 90(1) and Article 273 of the VAT Directive (see, to that effect, judgments of 26 January 2012, Kraft Foods Polska, C‑588/10, EU:C:2012:40, paragraph 24, and of 6 December 2018, Tratave, C‑672/17, EU:C:2018:989, paragraph 35).

62In that regard, it should be borne in mind that, pursuant to Article 273 of the VAT Directive, Member States may impose the obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, provided, inter alia, that that option is not relied on in order to impose additional invoicing obligations over and above those laid down in Chapter 3 of that directive.

63Given that Article 90(1) and Article 273 of the VAT Directive do not, outside the limits laid down therein, specify either the conditions or the obligations which the Member States may impose, those provisions give the Member States a margin of discretion, inter alia, as to the formalities to be complied with by taxable persons vis-à-vis the tax authorities in order to ensure that the taxable amount is reduced (judgment of 11 June 2020, SCT, C‑146/19, EU:C:2020:464, paragraph 35 and the case-law cited).

64However, the measures that the Member States have the option of adopting under Article 273 of the VAT Directive may not, in principle, derogate from the rules relating to the taxable amount of VAT except within the limits strictly necessary for achieving that specific aim. They must have as little effect as possible on the objectives and principles of the VAT Directive and may not therefore be used in such a way that they would have the effect of undermining VAT neutrality, which is a fundamental principle of the common system of VAT established by the relevant EU legislation (judgment of 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:C:2021:818, paragraph 60 and the case-law cited).

65In addition, if refunding the VAT becomes impossible or excessively difficult as a result of the conditions under which applications for reimbursement of tax may be made, that principle of neutrality of VAT and the principle of proportionality may require that the Member States provide for the instruments and the procedural rules necessary to enable the taxable person to recover the unduly invoiced tax (see, to that effect, judgment of 26 January 2012, Kraft Foods Polska, C‑588/10, EU:C:2012:40, paragraph 29 and the case-law cited).

66Consequently, the formalities to be complied with by taxable persons in order to exercise, vis-à-vis the tax authorities, the right to reduce the taxable amount for VAT purposes must be limited to those which make it possible to provide proof that, after the transaction has been concluded, part or all of the consideration will definitely not be received. It is for the national courts to ascertain whether that is true of the formalities required by the Member State concerned (see, to that effect, judgment of 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:C:2021:818, paragraph 61 and the case-law cited).

67In that regard, the Court has repeatedly held that the requirement that, in order to be able to reduce the taxable amount as set out in the initial invoice, the taxable person must be in possession of acknowledgment of receipt of a correcting invoice by the purchaser of the goods or services may, in principle, contribute not only to ensuring the correct collection of VAT and preventing evasion but also to eliminating the risk of loss of tax revenue and, therefore, pursues the legitimate objectives set out in Article 90(1) and in Article 273 of the VAT Directive (see, to that effect, judgment of 26 January 2012, Kraft Foods Polska, C‑588/10, EU:C:2012:40, paragraphs 32 and 33).

68As is apparent from the case-law of the Court, that finding also applies to the requirement which makes the reduction of the taxable amount contingent on the taxable person giving prior notice to its debtor, if the latter is a taxable person, of its intention to cancel a part or all of the VAT (see, to this effect, judgment of 6 December 2018, Tratave, C‑672/17, EU:C:2018:989, paragraphs 35 and 36).

69Consequently, requirements, such as those at issue in the main proceedings, that, in order to be able to reduce the taxable amount, the taxable person must correct the initial invoice on account of the total or partial non-payment and provide prior notice to its debtor of its intention to cancel the tax, so that the latter is aware for the purpose of adjusting the initial deduction, do not have the effect of undermining, in principle, the neutrality of VAT (see, to that effect, judgments of 26 January 2012, Kraft Foods Polska, C‑588/10, EU:C:2012:40, paragraph 37, and of 6 December 2018, Tratave, C‑672/17, EU:C:2018:989, paragraph 39).

70That said, the fact remains that it is for the referring court to ascertain whether such requirements do not appear to be, in the present case, excessively onerous for the taxable person, the supplier of goods or services (see, to that effect, judgment of 6 December 2018, Tratave, C‑672/17, EU:C:2018:989, paragraph 41).

71It is apparent from the documents of the file before the Court, which were confirmed during the hearing, that, first, the Bulgarian legislation, in the version applicable to the facts of the dispute in the main proceedings, did not provide for requirements to adjust the initial invoice and inform the debtor of the cancellation of the tax in the event of non-payment.

72Secondly, in accordance with that same information, Consortium Remi Group was deregistered from the VAT register on 7 March 2019 so that, on the date the application for set off at issue in the main proceedings was submitted, that taxable person no longer had the possibility of issuing corrected invoices. The Director specified in that regard, without being challenged on that point, that, under the relevant national provisions ratione temporis, the correction of the VAT could not be made when the taxable person had been deregistered from that register.

73Therefore, clearly, the correction of an invoice being, in the practice of the Bulgarian tax authorities, an essential condition for obtaining a reduction of the taxable amount, VAT neutrality is affected when it is impossible or excessively difficult for the taxable person to adjust such an invoice (see, to that effect, judgment of 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:C:2021:818, paragraph 63).

74Consequently, in a case such as that of the dispute in the main proceedings in which the taxable person is unable to issue a rectifying document in respect of invoices whose amount was not paid, the principles of VAT neutrality and proportionality require that the Member State concerned enables that taxable person to establish, by other means, before the national tax authorities, the non-payment of those invoices, which is at the origin of its right to the reduction of the taxable amount (see, to that effect, judgment of 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:C:2021:818, paragraph 65).

75In those circumstances, it must be held that the fact of rendering the right of reduction in the taxable amount of VAT, in the absence of relevant national provisions, subject to the condition that the initial invoice had been the subject of a correction goes beyond what is necessary to attain the objective pursued by Article 273 of the VAT Directive, consisting in eliminating the risk of loss of tax revenue, where that condition became impossible to satisfy.

76The same is true, a fortiori, of the obligation to inform the recipient of that invoice of the intention of the issuer of the invoice to cancel the VAT, such as that referred to by the fifth question, from whose very wording it is apparent, as it is from other statements set out in the request for a preliminary ruling, that that obligation constitutes a necessary condition, imposed by the practice of the Bulgarian tax authorities, for adjusting the VAT invoiced in the event of total or partial non-payment.

77That said, it should be observed that, in the present case, Consortium Remi Group was deregistered from the VAT register on account of a systematic failure to fulfil its obligations stemming from the ZDDS and that its application for set off related to the non-payment of invoices issued several years before its removal from the register. Accordingly, it is for the referring court to ascertain whether the taxable person is not responsible for being unable to issue corrected invoices.

78Having regard to the foregoing considerations, the answer to the second and fifth questions is that Article 90(1) and Article 273 of the VAT Directive, read in conjunction with the principles of fiscal neutrality and proportionality, must be interpreted as precluding, in the absence of specific national provisions, a requirement on the part of the tax authority which renders the reduction in the taxable amount of VAT, in the event of total or partial non-payment of an invoice issued by a taxable person, subject to the condition that that taxable person corrects the initial invoice beforehand and that it communicates beforehand to its debtor its intention to cancel the VAT, where it is impossible for that taxable person to make such an adjustment in due time, for reasons beyond its control.

The sixth question

79By its sixth question, the referring court asks whether Article 90(1) of the VAT Directive must be interpreted as meaning that any right to a reduction in the taxable amount of VAT in the event of total or partial non-payment of an invoice issued by a taxable person gives a right to a refund of the VAT paid by that taxable person, together with interest for late payment, and, if the question is answered in the affirmative, from which date such a right may be relied upon.

80In that regard, as recalled in paragraph 42 of the present judgment, the common system of VAT guarantees the neutrality of VAT and seeks to entirely relieve the trader of the VAT burden due or paid in all its economic activities. It is also apparent from the case-law cited in paragraph 63 of the present judgement that, while the Member States have a margin of discretion in determining the rules referred to in Article 90 of the VAT directive, those rules cannot undermine the principle of fiscal neutrality by making the taxable person bear the VAT burden in whole or in part.

81In particular, those rules must enable the taxable person, in appropriate circumstances, to recover the entirety of the debt arising from a reduction in the taxable amount of VAT, which implies that the refund must be made within a reasonable period of time by a payment in liquid funds or equivalent means and that, in any event, the method of refund adopted must not entail any financial risk for the taxable person (see, to that effect, judgment of 12 May 2021, technoRent International and Others, C‑844/19, EU:C:2021:378, paragraph 38).

82If, in the event that the refund from a reduction in the taxable amount of VAT is not made within a reasonable period of time, the taxable person were not entitled to default interest, the taxable person’s situation would be negatively affected, in breach of the principle of fiscal neutrality (see, to that effect, judgment of 12 May 2021, technoRent International and Others, C‑844/19, EU:C:2021:378, paragraphs 39 and 41).

83It follows that, even though Article 90 of the VAT directive does not lay down an obligation to pay interest on the VAT to be refunded following a reduction in the taxable amount of VAT or specify the date from which such interest is payable, the principle of fiscal neutrality of the VAT system requires that the financial loss incurred on account of a refund of excess VAT not made within a reasonable period of time be compensated through the payment of default interest (see, to that effect, judgment of 12 May 2021, technoRent International and Others, C‑844/19, EU:C:2021:378, paragraphs 40 and 41).

84In such a situation, the taxable person receives excess VAT which must be refunded to it, but which is likely to incur financial loss in that regard, on account of the unavailability of the sums of money at issue. If, in the event that the tax authorities do not reimburse that excess within a reasonable period of time, the taxable person were not entitled to default interest, the taxable person’s situation would be negatively affected, thereby undermining the principle of fiscal neutrality (judgment of 12 May 2021, technoRent International and Others, C‑844/19, EU:C:2021:378, paragraph 42).

85As regards, more specifically, the rules for applying interest in relation to the refund arising from a reduction in the taxable amount of VAT, those rules fall within the procedural autonomy of the Member States, circumscribed by the principles of equivalence and effectiveness (see, by analogy, judgment of 13 October 2022, HUMDA, C‑397/21, EU:C:2022:790, paragraph 45).

86Accordingly, it is for the referring court to determine, in the light of those principles and all the particular circumstances of the dispute before it, whether, in the present case, it is necessary to pay a refund arising from the reduction in the taxable amount of VAT and, in so far as it finds that that refund was not paid within a reasonable period of time, the point from which default interest is added to the amount of that refund (see, to that effect, order of 5 October 2023, ZSE Elektrárne, C‑151/23, EU:C:2023:751, paragraph 28).

87In the present case, as observed by, in essence, the Advocate General in points 99, 100 and 102 of her Opinion, in the absence of specific rules provided for by national law, interest in relation to the right to a refund by reason of a reduction in the taxable amount of VAT can only be calculated from the date on which the taxable person considers that the non-payment of the debt at issue is definitive, within the meaning of Article 90 of the VAT Directive, and asserts its right to a reduction in the taxable amount of VAT in the VAT return relating to the ongoing tax period since, before that date, the legal basis for the payment of the VAT exists on the basis of Article 63 of that directive.

88In the light of the foregoing, the answer to the sixth question is that Article 90(1) of the VAT Directive, read in conjunction with the principle of fiscal neutrality, must be interpreted as meaning that any right to a reduction in the taxable amount of VAT in the event of total or partial non-payment of an invoice issued by a taxable person gives a right to a refund of the VAT paid by that taxable person, together with interest for late payment, and that, in the absence of rules in the legislation of a Member State for applying any interest due, the date from which the taxable person asserts its right to that reduction in the VAT return relating to the ongoing tax period is the starting point for the calculation of that interest.

Costs

89Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Tenth Chamber) hereby rules:

Article 90 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in conjunction with the principles of fiscal neutrality, proportionality and effectiveness,

must be interpreted as not precluding legislation of a Member State which provides for a limitation period to apply for a value added tax (VAT) refund resulting from a reduction in the taxable amount of VAT in the event of total or partial non-payment, the expiry of which results in penalising an insufficiently diligent taxable person, provided that that limitation period only begins to run from the date on which that taxable person was able, without showing a lack of diligence, to assert its right to a reduction. In the absence of national provisions concerning the rules governing the exercise of that right, the starting point for such a limitation period must be identifiable by the taxable person with a reasonable degree of probability.

Article 90(1) and Article 273 of Directive 2006/112, read in conjunction with the principles of fiscal neutrality and proportionality,

must be interpreted as precluding, in the absence of specific national provisions, a requirement on the part of the tax authority which renders the reduction in the taxable amount of value added tax (VAT), in the event of total or partial non-payment of an invoice issued by a taxable person, subject to the condition that that taxable person corrects the initial invoice beforehand and that it communicates beforehand to its debtor its intention to cancel the VAT, where it is impossible for that taxable person to make such an adjustment in due time, for reasons beyond its control.

Article 90(1) of Directive 2006/112, read in conjunction with the principle of fiscal neutrality,

must be interpreted as meaning that any right to a reduction in the taxable amount of value added tax (VAT) in the event of total or partial non-payment of an invoice issued by a taxable person gives a right to a refund of the VAT paid by that taxable person, together with interest for late payment, and that, in the absence of rules in the legislation of a Member State for applying any interest due, the date from which the taxable person asserts its right to that reduction in the VAT return relating to the ongoing tax period is the starting point for the calculation of that interest.

Signatures

[Signatures]

( *1 ) Language of the case: Bulgarian.

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 7 September 2023 ¹

(Reference for a preliminary ruling – Common system of value added tax – Directive 2006/112/EC – Taxable amount – Reduction of the taxable amount – Total or partial non-payment of the price after the transaction has taken place – Option to derogate available to Member States under Article 90(2) of the VAT Directive – Direct applicability of Article 90(1) of the VAT Directive – Limitation period – Start of the limitation period – Point at which the taxable amount is reduced – Reduction not retroactive – Taxable person’s entitlement to interest)

I. Introduction

1In commercial transactions, customers regularly fail to pay their invoices on time, or indeed at all. This is particularly unpleasant for undertakings that are taxable persons within the meaning of the VAT Directive. The reason for this is that, under VAT law, the taxable person owes the VAT even before the actual taxpayer (the recipient of the supply) has paid that tax to the supplier. As a result, the undertaking must pre-finance the VAT until it is paid by its customer, thereby granting the State an interest-free loan. This case concerns a number of unpaid invoices dating back to the years 2006 to 2012.

2Therefore, many Member States provide for the liability to VAT which the undertaking has already incurred to be adjusted accordingly in the event of non-payment. According to the referring court, Bulgarian law, on the other hand, does not provide for the possibility of reducing the taxable amount in the event of total or partial non-payment. It does so only if the price changes. Under [Bulgarian] tax law, moreover, refund claims are subject to a general limitation period of five years.

3Consequently, the question for the Court here is whether the European Union’s harmonised VAT law requires an adjustment option to be made available and, if so, whether the Member State can attach a time limit to that option. If that option is subject to a limitation period, this raises the further question of the date from which that period starts to run.

II. Legislative framework

A. European Union law

4The EU law framework for this case is provided by Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax ² (‘the VAT Directive’).

5Article 63 of the VAT Directive provides:

‘The chargeable event shall occur and VAT shall become chargeable when the goods or the services are supplied.’

6Article 66(b) contains an exception:

‘By way of derogation from Articles 63, 64 and 65, Member States may provide that VAT is to become chargeable, in respect of certain transactions or certain categories of taxable person at one of the following times: …

(b) no later than the time the payment is received’.

7Article 73 of the Directive governs the taxable amount and reads:

‘In respect of the supply of goods or services, other than as referred to in Articles 74 to 77, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.’

8Article 90 of the VAT Directive governs the reduction of the taxable amount:

‘1. In the case of cancellation, refusal or total or partial non-payment, or where the price is reduced after the supply takes place, the taxable amount shall be reduced accordingly under conditions which shall be determined by the Member States.

2. In the case of total or partial non-payment, Member States may derogate from paragraph 1.’

9Article 184 of the VAT Directive concerns the adjustment of deductions and reads:

‘The initial deduction shall be adjusted where it is higher or lower than that to which the taxable person was entitled.’

10Article 185 of the Directive deals with the case of non-payment and provides:

‘1. Adjustment shall, in particular, be made where, after the VAT return is made, some change occurs in the factors used to determine the amount to be deducted, for example where purchases are cancelled or price reductions are obtained.

2. By way of derogation from paragraph 1, no adjustment shall be made in the case of transactions remaining totally or partially unpaid or in the case of destruction, loss or theft of property duly proved or confirmed, or in the case of goods reserved for the purpose of making gifts of small value or of giving samples, as referred to in Article 16.

However, in the case of transactions remaining totally or partially unpaid or in the case of theft, Member States may require adjustment to be made.’

11Article 203 of the VAT Directive deals with liability to VAT for an incorrect invoice and reads:

‘VAT shall be payable by any person who enters the VAT on an invoice.’

12Article 273 of the VAT Directive provides:

‘Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers. …’

B. Bulgarian law

13The VAT Directive was transposed into Bulgarian law, with effect from 1 January 2007, by the Zakon za danaka varhu dobavenata stoynost (Law on value added tax; ‘the ZDDS’). Article 115(1) and (3) of the ZDDS provides:

‘(1) In the event of a change in the taxable amount of a transaction and in the event of the cancellation of a supply for which an invoice has been issued, the supplier shall be obliged to issue an invoice notice.

(3) In the event of an increase in the taxable amount, a debit note shall be issued; in the event of a reduction in the taxable amount or a cancellation of transactions, a credit note shall be issued’.

14The Danachno-osiguritelen protsesualen kodeks (Tax and Social Security Procedure Code; ‘the DOPK’) contains rules on claims for tax refunds. Thus, Article 129(1) of the DOPK lays down a limitation period in respect of claims for refunds. According to that provision, an application for set-off or refund shall be examined if made within a period of five years from 1 January of the year following the year in which the ground for the refund arose, unless the law provides otherwise.

III. Dispute in the main proceedings

15‘Consortium Remi Group’ AD (‘CRG’), which has its registered office in Varna (Bulgaria), is engaged in the construction of buildings and facilities. It was registered under the ZDDS in 1995, but was deregistered on 7 March 2019 as a result of having been found to have systematically breached its obligations under the ZDDS. By judgment of the Varnenski Okrazhen sad (Regional Court, Varna, Bulgaria) of 18 September 2020, CRG was declared insolvent and insolvency proceedings were opened.

16In the years 2006 to 2010 and 2012, CRG issued invoices to five Bulgarian companies for the supply of goods and the provision of services. VAT was entered on those invoices. According to the request for a preliminary ruling, VAT was paid for most of the taxable periods. The total amount of VAT entered on those invoices is 618171 leva (BGN), which corresponds to EUR 310000 approximately. In the absence of further information, it is assumed that the request for a preliminary ruling relates only to the VAT both entered and paid by CRG.

17The tax assessment notice of 31 January 2011 established CRG’s liabilities under the ZDDS for the period from 1 January 2007 to 31 July 2010, including the VAT which had been entered on the invoices issued to one of the aforementioned companies. CRG brought an action against that notice. This was, however, dismissed by judgment of the administrative court at first instance. The decision of that court was in turn confirmed by judgment of the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria).

18On 7 February 2020, CRG applied to the revenue authorities for the amount of BGN 1 282 582.19 BGN (approximately EUR 640000) – consisting of a principal amount of BGN 618 171.16 (the VAT entered on the invoices issued to the aforementioned recipients in the amount of approximately EUR 310000 EUR) and interest in the amount of BGN 664 411.03 BGN (approximately EUR 330000, calculated from the first day of the month following the issue of the invoices until 31 July 2019) – to be set off against its liabilities under public law.

19By a set-off and refund notice of 6 March 2020, the tax authority refused to set off the aforementioned amounts of wrongly paid and collected VAT. The notice stated that the application for set-off had in any event been filed after the expiry of the limitation period laid down in Article 129(1) of the DOPK. Furthermore, CRG had proved neither that amounts in the aforementioned values had been wrongly paid or collected, nor that it had in respect of those sums established and due claims against the public exchequer.

20CRG lodged an administrative appeal against the set-off and refund notice. In support of the forms of order it sought, it adduced judicial decisions concerning the opening of insolvency proceedings against the companies which had received the invoices in question. Three of those companies had since been declared insolvent and an order had been made to start the liquidation of their assets.

21However, the request for a preliminary ruling does not make clear what happened to the other recipients of CRG’s goods and services. Also still unclear is why no payment was made and whether CRG had (unsuccessfully) attempted to recover those debts under civil law, as are the dates on which the insolvency proceedings were opened. Neither is it apparent from the request for a preliminary ruling when those insolvency proceedings were concluded. In any event, the debts in question date back to the years 2006 to 2012. At the hearing, it emerged that some of the recipient companies were wound up as early as 2012, 2018 and 2020, following the conclusion of the insolvency proceedings. In the case of the others, the insolvency proceedings are ongoing.

22The set-off and refund notice was confirmed in full by decision of the Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ [Varna] pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite (Director of the ‘Appeals and Tax and Social Security Practice’ Directorate[,Varna,] at the Central Administration of the National Revenue Agency) (‘the Director’) of 22 May 2020.

23The Director based his decision on, inter alia, the fact that, in accordance with Article 90(2) of the VAT Directive, Bulgaria had derogated from Article 90(1) of that directive. He noted that Bulgarian law makes no provision for the possibility of reducing the taxable amount in the event of total or partial non-payment. Article 115(1) and (3) of the ZDDS covers only other cases. Furthermore, the appellant in cassation had not proved, but only alleged, that all or some the invoices had gone unpaid. In addition, all of the recipients of the invoices in question had deducted as input tax the VAT forming part of the price of the goods or services, so that any refund of the tax invoiced by the supplier of goods or services would certainly lead to a loss of tax revenue.

24CRG was unsuccessful in the action it brought against the set-off and refund notice before the Administrativen sad Varna (Administrative Court, Varna, Bulgaria). That court calculated the general time limit for applying for a refund laid down in Article 129 of the DOPK from the date on which VAT was entered on the invoices in question. It therefore held the application for a refund made on 7 February 2020 to be inadmissible for having been filed too late. CRG brought against the judgment at first instance of 16 February 2021 an appeal in cassation before the referring court.

25In the course of examining the merits of the appeal in cassation against the set-off and refund notice, however, the Varhoven administrativen sad (Supreme Administrative Court) formed the view that the decision on the dispute before it requires an interpretation of provisions of EU law.

IV. Procedure before the Court and questions referred for a preliminary ruling

26Consequently, the Varhoven administrativen sad (Supreme Administrative Court), seised of the aforementioned dispute, referred the following questions to the Court of Justice on 4 May 2022:

In the event of a derogation in accordance with Article 90(2) of the VAT Directive, do the principle of neutrality and Article 90 of that directive allow a provision of national law such as the second sentence of Article 129(1) of the Danachno-osiguritelen protsesualen kodeks (Tax and Social Security Procedure Code), which provides for a limitation period for the submission of an application for a set-off or refund of the tax charged by the taxable entity in respect of the supply of goods or services in the event of total or partial non-payment by the recipient of the supply?

Irrespective of the answer to the first question, in the circumstances of the main proceedings, is it a necessary condition for the recognition of the right to a reduction in the taxable amount under Article 90(1) of the VAT Directive that the taxable entity corrects the invoice which it has issued, as regards the VAT charged, on account of total or partial non-payment by the recipient of the price of the supply under the invoice, before submitting the application for a refund?

Depending on the answers to the first two questions: How must Article 90(1) of the VAT Directive be interpreted when determining the time at which the ground for a reduction of the taxable amount arises in the event of total or partial non-payment of the price where there is no national provision in place on account of a derogation from Article 90(1)?

How must the reasoning in the judgments of 27 November 2017, Enzo Di Maura (C‑246/16, EU:C:2017:887, paragraphs 21 to 27), and of 3 July 2019, UniCredit Leasing (C‑242/18, EU:C:2019:558, paragraphs 62 and 65) be applied if Bulgarian law does not contain any specific conditions for the application of the derogation under Article 90(2) of the VAT Directive?

Are the principle of neutrality and Article 90 of the VAT Directive consistent with a tax and insurance practice under which, in the event of non-payment, no correction of the tax charged is permitted until the recipient of the supplies or services – provided that the recipient is a taxable entity – has been notified of the cancellation of the tax, so that the deduction initially made by the recipient is corrected?

Does the interpretation of Article 90(1) of the directive permit the assumption that a possible right to a reduction of the taxable amount in the event of total or partial non-payment gives rise to a right to a refund of the VAT paid by the supplier, plus interest for late payment, and from what point in time?’

27Written observations on those questions have been submitted in the proceedings before the Court by the Bulgarian tax authority and the European Commission. They and the Republic of Bulgaria attended the hearing held on 12 May 2023.

V. Legal assessment

A. The questions referred for a preliminary ruling

28The six questions referred for a preliminary ruling can be divided into four groups. Thus, the referring court asks to what extent a Member State can avail itself of the power which Article 90(2) of the VAT Directive makes available in the event of total or partial non-payment and whether Article 90(1) is directly applicable (Questions 1 and 4 – see Section B below).

29Question 3 looks at the specific date from which a taxable person may reduce the taxable amount pursuant to Article 90 of the VAT Directive (see Section C below).

30The referring court also asks, in effect, about the detailed rules governing the adjustment of the taxable amount by the taxable person (Questions 2 and 5). This calls for a clarification of whether, before the supplier adjusts the taxable amount, the original invoice issued to the recipient of the supply must also be adjusted, or whether the recipient of the supply must at least be informed of the adjustment of the taxable amount. Ultimately, the input tax deduction made by the recipient of the supply was too high if it never paid the invoice amount (see Section D below).

31By Question 6, the referring court asks whether, and if so from what date, the Member State has to pay default interest if the taxable amount is changed. In this case, CRG seeks interest from the date when the invoice was issued and not paid, even though the taxable amount was not adjusted until February 2020 (see Section E below).

32It must be made clear at the outset that the Court has jurisdiction to interpret EU law only as regards its application in a new Member State with effect from the date of that State’s accession to the European Union. ³ However, the main proceedings appear to concern, inter alia, supplies of goods and services made in 2006, that is to say, before the Republic of Bulgaria acceded to the European Union on 1 January 2007.

33As the Court has already similarly explained in connection with the adjustment of an input tax deduction under Articles 184 and 185 of the VAT Directive, ⁴ the reduction of the taxable amount is intended to correct a tax liability which arose in the past. An entitlement to reduce the taxable amount is therefore inextricably linked to the accrual of the tax liability. Consequently, even circumstances emerging after a Member State’s accession to the European Union do not enable the Court to interpret the VAT Directive, if the supply of goods or the provision of services rendering the VAT chargeable occurred prior to that Member State’s accession. ⁵ In so far as the questions raised by the referring court concern the adjustment of the tax liability for supplies of goods and services made in 2006, the Court does not therefore have jurisdiction.

B. Scope of Article 90(2) of the VAT Directive

34By Questions 1 and 4, the referring court asks to what extent a Member State may avail itself of the power provided for in Article 90(2) of the VAT Directive. Article 90(1) of the VAT Directive provides that, in the case of, inter alia, total or partial non-payment after the supply takes place, the taxable amount must be reduced accordingly under conditions which are to be determined by the Member States. However, Article 90(2) of that directive allows Member States to derogate from that provision in the case of total or partial non-payment.

1. May a reduction of the taxable amount be excluded?

35According to the referring court, Bulgaria availed itself of the derogation option and excluded outright any correction of the taxable amount in the case of total or partial non-payment.

36That state of affairs is not compatible with the VAT Directive. It has been clear since the Court’s decision in Enzo Di Maura in 2017, at the latest, that, although Member States may derogate from the requirement to adjust the taxable amount laid down in Article 90(1) of the VAT Directive, the EU legislature has not given them the power to exclude such a reduction outright. ⁶ In particular, the power to derogate provided for in paragraph 2 applies only where there is uncertainty as to the definite nature of the non-payment of an invoice. It does not concern the question whether a reduction of the taxable amount may be dispensed with in the event of non-payment. ⁷

37On the one hand, the Bulgarian legislature can prospectively eliminate that position in Bulgarian law, which is contrary to EU law. According to what was said at the hearing, a legislative amendment doing just that, effective from 1 January 2023, has been introduced. On the other hand, that position can be eliminated by way of an interpretation that is consistent with the VAT Directive, if and to the extent that Bulgarian law lends itself to such an interpretation. It is for the referring court to examine whether the latter is the case, although it would appear not to be. The third option is to apply Article 90(1) of VAT Directive directly for the benefit of the taxable person.

2. Direct applicability of Article 90(1) of the VAT Directive

38As the Court has already held on a number of occasions, ⁸ although Article 90 of the VAT Directive grants the Member States a certain degree of discretion when adopting the measures to determine the amount of the reduction, that does not alter the precise and unconditional nature of the obligation to allow the reduction in the taxable amount in the cases referred to by that provision. It is therefore directly applicable. ⁹

39Conversely, in a decision in 2014, the Court held that taxable persons cannot rely, under Article 90(1) of the VAT Directive, on a right to a reduction of their taxable amount for VAT in the case of non-payment of the price if the Member State concerned intended to apply the derogation provided for in Article 90(2) of that directive. ¹⁰ On that basis, CRG would not be able to correct the taxable amount by relying on Article 90(1) of the VAT Directive and would have to resort to an action for a declaration of State liability against Bulgaria.

40Like the referring court, I am of the view, however, that the aforementioned decision must be qualified in the light of the case-law established by the Court thereafter, in particular in the judgments in Enzo Di Maura and Uni Credit Leasing. ¹¹ As already stated earlier (point 36), the power to derogate provided for in Article 90(2) of the VAT Directive allows Member States only to take into account the uncertainty that exists, in the event of total or partial non-payment of the price, as to whether that non-payment is permanent or only temporary. This would allow a Member State, for example, to lay down certain rules applicable for as long as the uncertainty is said to be only temporary. That power does not, however, allow a Member State to exclude the right to adjust the taxable amount as a matter of principle.

41Consequently, Article 90(1) of the VAT Directive ceases to be directly applicable only if the Member State concerned also intended to apply (in a manner consistent with that directive) the exception provided for in Article 90(2) of that directive. ¹² This is the case only where the Member State’s derogating measure continues to allow the taxable amount to be adjusted as a matter of principle in the event of total or partial non-payment of the price. Bulgaria, however, did not allow adjustments to be made in the event of non-payment and did not therefore intend to avail itself of the power to derogate provided for in EU law. Consequently, Article 90(1) of the VAT Directive can be applied directly.

3. Temporal limits on the right to reduce the taxable amount

42Since Article 90(1) of the VAT Directive – in common, according to the Court, with Article 273 of that directive – does not, other than in the form of the limits imposed, specify either the conditions or the obligations which Member States may lay down, it grants the Member States a margin of discretion, in particular in relation to the formalities which the taxable person must comply with vis-à-vis the tax authorities in order to reduce the taxable amount. ¹³

43To my mind, the discretion thus available to the Member States includes, inter alia, a temporal limit on the right to adjust the taxable amount. As the Court has already held on a number of occasions, EU law does not require that the possibility of applying for a refund should exist without any temporal limit. This would, rather, be contrary to the principle of legal certainty, which requires that the tax position of the taxable person, having regard to his rights and obligations vis-à-vis the tax authority, not be open to challenge indefinitely. ¹⁴

44Consequently, Article 90(1) of the VAT Directive does not in principle preclude national law from laying down a temporal limit on the right to reduce the taxable amount.

4. Conditions governing the imposition of a time limit consistent with EU law on the reduction of the taxable amount

45The date from which that time limit starts to run is a matter for national law, subject to compliance with the principles of equivalence and effectiveness. ¹⁵ The principle of effectiveness in particular requires that a temporal limit on the reduction of the taxable amount provided for in Article 90(1) of the VAT Directive conform to the EU law principles that inform VAT law.

46First, it follows from the Court’s settled case-law that Article 90(1) of the VAT Directive is the expression of a fundamental principle of the VAT Directive. According to that principle, the taxable amount is the consideration actually received. It further follows from this that the tax authorities may not collect an amount of VAT exceeding the tax which the taxable person received. ¹⁶ It requires the Member State to reduce the taxable amount accordingly. ¹⁷

47Secondly, the principle of fiscal neutrality must be observed. This constitutes a fundamental principle of VAT that arises from the nature of the latter as a tax on consumption. ¹⁸ It means, inter alia, that the undertaking, as tax collector acting on behalf of the State, is in principle to be relieved of the ultimate burden of VAT, ¹⁹ in so far as its activity is itself aimed (in principle) at the delivery of taxable supplies. ²⁰

48In accordance with Article 63 of the VAT Directive, however, VAT becomes chargeable as soon as the goods or the services are supplied. It is not decisive whether the recipient has also paid the consideration (so-called ‘imputed taxation’). If, however, the supplier undertaking is compelled, because of the way in which the tax works, to be liable over a period of years for VAT which it has not been able to collect, such pre-financing places a considerable burden on the undertaking in question. In those circumstances, VAT can no longer be said to be completely ²¹ neutral.

49Thirdly, the pre-financing of VAT affects the fundamental rights of the taxable person (such as, for example, the freedom to pursue an occupation, the freedom to conduct a business and the fundamental right to property – Articles, 15, 16 and 17 of the Charter of Fundamental Rights). What is more, it gives rise to unequal treatment within the meaning of Article 20 of the Charter by comparison with the treatment afforded to taxable persons for whom, in accordance with Article 66(b) of the VAT Directive, tax becomes chargeable only when payment is received (so-called ‘actual taxation’).

50When measured against those principles of EU law, therefore, a permissible time limit on the possibility of reducing the taxable amount in accordance with Article 90 of the VAT Directive presupposes that that time limit is set at a date from which the taxable person was also able to avail himself of Article 90(1) of the VAT Directive. Only on this basis is account taken of the idea that the taxable person acts ‘only’ as tax collector for the State ²² and, therefore, does not owe more tax than it has actually been able to collect. If, in addition, that time limit is intended to ensure legal certainty (see in this regard point 43 above), it must be recognisable to the taxable person.

51The date on which the supply is made or the invoice is issued – which the court of first instance in the main proceedings took into account – is unsuitable for that purpose. ²³ At this stage, the taxable person generally assumes that the agreed price will actually be paid. In those circumstances, therefore, the conditions laid down in Article 90(1) are not yet met.

52The date which the national legislature selects as the starting point for a limitation period is a matter for its discretion. It can select the earliest date for reducing the taxable amount (sufficient likelihood that the recipient of the supply will not pay – such as, for example, non-payment notwithstanding a reminder) or the latest date (likelihood bordering on certainty that the recipient of the supply will not pay – such as, for example, the conclusion of insolvency proceedings).

53If no such selection is made (as in this instance), however, the only conceivable starting point for a limitation period is the latest possible date. This follows not least from the Court’s decision in the judgment in FGSZ. ²⁴ According to that decision, where a Member State has provided that the right of a creditor to reduce the taxable amount referred to in Article 90 of the VAT Directive is subject to a limitation period, ‘that period must begin to run not from the date of performance of the payment obligation originally provided for, but from the date on which the debt has become definitively irrecoverable’.

54That assertion can be transposed to the present case. The only time limit laid down in Bulgarian law is the general time limit set out in Article 129(1) of the DOPK, which starts to run when the entitlement to a refund arises. Bulgarian law does not contain a special rule on when the entitlement to a refund arising from a reduction of the taxable amount as provided for in Article 90(1) of the VAT Directive arises.

55Where, however, a Member State, in a manner contrary to EU law, denies the taxable person the possibility of reducing the taxable amount in the event of non-payment, then again a general limitation period cannot begin to run until the latest date (see point 52 above). That is the date on which there is a likelihood bordering on certainty that – as the Commission too has submitted – payment can no longer be expected, which is to say not until the date on which the insolvency proceedings are concluded. Consequently, Article 90(1) of the VAT Directive precludes a limitation period set at an earlier date.

5. Interim conclusion

56Article 90(1) of the VAT Directive is directly applicable where the Member State erroneously applies the option to derogate provided for in Article 90(2) of that directive, in that it fails to take into account the uncertainty of definite non-payment and instead excludes the right to reduce the taxable amount altogether (answer to Question 4).

57At the same time, Article 90 of the VAT Directive does not preclude an appropriate limitation period where this does not begin to run until the date on or after which the taxable person was able to reduce the taxable amount in the event of total or partial non-payment of the price. A limitation period which starts to run from when the supply is made or the invoice issued, however, is not compatible with Article 90 of that directive. If that date is not specified by law, a limitation period cannot begin to run until the date on which a likelihood bordering on certainty exists that the debt has become irrecoverable (answer to Question 1).

C. Date of reduction of the taxable amount in the event of total or partial non-payment

58However, the decisive question – which the referring court too raises in Question 3 – is when a reduction of the taxable amount in the event of total or partial non-payment, as provided for in Article 90(1) of the VAT Directive, can take place for the benefit of the taxable person at all.

59In connection with Article 90 of the VAT Directive, the Court speaks of a ‘right to reduce the taxable amount’. ²⁵ That right exists for the benefit of the taxable person. Thus, the taxable person can seek to reduce the taxable amount if it believes that payment can no longer be expected in the foreseeable future. There is, however, no obligation to assert that right. The taxable person can continue to pre-finance the VAT if and because it assumes that its customer will pay soon.

60Consequently, the taxable person alone is able to assess whether payment will still or will no longer be made in the foreseeable future. If that is the case, then the taxable person’s declaration as to when, in its view, non-payment can henceforth be assumed to be ‘definite’ is decisive too. That declaration takes place while the relevant tax assessment period is ongoing.

61It follows that a reduction of the taxable amount of a supply completed by the supplier is dependent on the supplier’s decision and declaration. This cannot be made retroactively, since a self-assessment system (that is, here, a system within which the taxable person calculates and determines his or her own liability to tax) operates on the premiss that, until such a declaration is made, the taxable person continues to assume that payment of the price will still be made sufficiently promptly.

62The position would be otherwise only if national law provided for a specific, appropriate date from which the taxable amount may in principle be reduced. No such date is provided for in this instance, however. There is therefore no specific date on which the reduction of the taxable amount must be made. Rather, there is a period during which the taxable person can assert its right to reduce the taxable amount.

1. Latest date for reducing the taxable amount

63As the Court has already held, ²⁶ the latest date from which a reduction of the taxable amount may be made by the taxable person is the date on which it is certain that payment for the completed supply will not now be made. This might, for example, be the date on which insolvency proceedings in respect of the recipient of the supply are concluded. A reduction of the taxable amount may not, however, depend solely on the unsuccessful conclusion of insolvency proceedings. ²⁷

64In this regard, the Court has held that reliance on the ‘definite unrecoverability’ of a debt is disproportionate, ²⁸ particularly since subsequent payments may increase the taxable amount again. What is more, a system of strict liability would go beyond what is necessary to preserve the public exchequer’s rights. ²⁹ The position is no different in the case of the longer-term pre-financing, on a strict liability basis, of an uncollectable tax (such as over a period of a number of years, for example until the conclusion of insolvency proceedings, for example). To my mind, another conceivable latest date might be that on which the claim to payment under civil law becomes time-barred. In this connection, it is safe to assume that the recipient of the supply – who has not paid before – will certainly not pay a debt which has already become time-barred.

65In the light of its function as tax colletor, its fundamental rights and the principle of neutrality, however, the taxable person must be able to reduce the taxable amount at an earlier date too.

2. Earliest date for reducing the taxable amount

66When it comes to determining the earliest date from which there can be said to be a total or partial non-payment such as to entitle the taxable person to reduce the taxable amount as provided for in Article 90(1) of the VAT Directive, the Court has not to date given any decisions. In my view, the answer to this question calls for account to be taken of Article 66(b) and Article 194 et seq. of the VAT Directive in conjunction with the principle of equal treatment (Article 20 of the Charter). These provisions require that taxable persons must be able to reduce the taxable amount promptly.

67Article 66(b) of the VAT Directive provides that, in the case of a certain group of taxable persons (as determined, for example, by the volume of transactions), Member States may peg the accrual of VAT to the ‘collection of the price’ (‘actual taxation’). That option has been taken up by at least some Member States. Account must also be taken of the supplies in the case of which the VAT Directive provides for or allows the tax liability to be shifted to the recipient of the supply (reverse charge – see Article 194 et seq. of the VAT Directive). Undertakings which deliver such supplies – services to businesses established in other countries, for example – do not have to pre-finance the VAT. The latter schemes serve in a broader sense to simplify the administration of tax.

68An undertaking which has to pre-finance taxes over a long period of time under the imputed taxation regime – that is to say, whereby tax liability accrues irrespective of when payment is received – already has a competitive disadvantage in relation to an undertaking subject to the actual taxation regime, which has to pay tax from prices collected. The same is true of undertakings which deliver only supplies the tax liability in respect of which is transferred to the recipient of the supply. In the light of primary law, in particular the Charter, however, such unequal treatment is justifiable only if the pre-financing period is not too long.

69When it comes to interpreting Article 90(1) of the VAT Directive, it is also important to bear in mind that a subsequent increase of the taxable amount always remains a possibility under tax law. ³⁰ Thus, should a payment go on to be made to the undertaking at a later stage (during or following the conclusion of insolvency proceedings, for example), the tax liability must be increased accordingly at that time. This follows not least from Article 73 of the VAT Directive, which states that the taxable amount is to include everything which the recipient of the supply or a third party spends on the supply.

70A reduction of the taxable amount subject to the reservation that it may be increased in the event of a later payment is less onerous for the taxable person, and thus more proportionate, than years-long pre-financing pending the opening or even the conclusion of insolvency proceedings. ³¹

71A differentiation between debts the non-payment of which is definite and debts that do not fall into that category is not possible in any event in VAT law. This has to do with the fact that ‘definite’ non-payment cannot exist in VAT law. This is precluded not least by the wording of Article 73 of the VAT Directive. This states that the taxable amount also includes payments by a third party and is thus separate from the capacity to pay or the existence of the debtor. ³² What is more, VAT law does not take as its point of reference the presence of an enforceable debt, as is apparent from the taxation of the payment of a tip, ³³ accidental overpayments or the payment of a debt of honour. ³⁴ Consequently, there is only ever a certain likelihood of non-payment, which increases in particular with the duration of the non-payment and can be pinned down on the basis of the circumstances of the non-payment (see in this regard point 63 et seq. above).

72The only decisive factor, therefore, is whether a debt is unenforceable for the foreseeable future. Such unenforceability may be present not least in the case of a serious refusal to pay by the debtor. If, for example, the debtor contests the existence of the debt itself or the amount thereof, then there is an increased likelihood that the debt will not be enforceable, or not in full, for a longer period of time.

73On the other hand, where tax is levied indirectly, the State must rely on VAT being ‘collected’ by the taxable person. Account must therefore be taken of the measures which are available to the taxable person and which it is expected to take. What measures an undertaking may be required to take in this regard in each Member State before it is able to adjust its tax liability on account of non-payment of the price will depend not least on the circumstances present in the Member State concerned. The Court can only provide guidance in this regard.

74The Member State may, for example, require evidence of the likelihood of a more prolonged period of non-payment. The mere assertion of such is not enough. It would also be proportionate to determine a reasonable period of non-payment (such as, for example, by analogy with Article 3(3)(b) of Directive 2011/7/EU on combating late payment in commercial transactions, ³⁵ 30 days following receipt of the invoice or, alternatively, 14 days following the issue of a reminder) at the end of which there can be assumed to be non-payment within the meaning of Article 90(1) of the VAT Directive, provided that there are no indications to the contrary.

75The decisive criterion, in my opinion, is whether the taxable person can prove to the tax authority that there is a sufficient likelihood ³⁶ of definite non-payment, even though it has tried to discharge its function as tax collector for the State. On the other hand, an obilgation to collect potentially worthless debts owed to the State through the courts, at considerable cost, is not compatible with either the principle of neutrality or the principle of proportionality.

76Generally speaking, an attempt to enforce the debt is required before the taxable amount can be reduced. This is proportionate provided that there is nothing to indicate that such an attempt will be unsuccessful or uneconomical anyway. To this extent, the taxable person can decide through its conduct at what point in the period outlined above to assert its ‘right to reduce the taxable income’

3. Interim conclusion

77The date from which a taxable person can reduce the taxable amount for the first time (earliest date) in the event of total or partial non-payment as provided for in Article 90(1) of the VAT Directive depends on the situation obtaining in the Member State concerned and the circumstances of the particular case which the referring court must assess.

78That said, the principle of neutrality prohibits a disproportionately long pre-financing of the tax, provided that the taxable person (the supplier) has taken reasonable steps to discharge its function as tax collector for the State. The latter always presupposes the issue of an unsuccessful request for payment (reminder) to the recipient of the supply. It does not, however, require unsuccessful court proceedings or the opening or conclusion of insolvency proceedings in respect of the assets of the recipient of the supply (answer to Question 3).

D. Conditions for reduction of the taxable amount by the taxable person

79Article 90(1) of the VAT Directive – in common, according to the Court, ³⁷ with Article 273 of that directive – gives Member State a margin of discretion, inter alia, as to the formalities to be complied with by taxable persons vis-à-vis the tax authorities of the Member States before reducing the taxable amount. ³⁸ However, those measures must have as little effect as possible on the objectives and principles of the VAT Directive and may not therefore be used in such a way that they would have the effect of undermining the neutrality of VAT. ³⁹

80It follows that the only permissible requirements are formal ones as to proof that the consideration for the supply was not definitely obtained, in part or in full, after that supply had been completed. ⁴⁰

1. Need for the invoice to be corrected?

81This does not include correcting the invoice. Proof that payment was not made can be furnished in the form of a reminder letter, an action at law or a written refusal to pay by the recipient of the supply, but not in the form of a correction of the invoice by the supplier.

82What is more (as stated in point 71 above), Article 90 of the VAT Directive does not presuppose definite non-payment for VAT purposes. As is apparent not least from Article 73 of that directive, subsequent successful attempts at enforcement will increase the taxable amount again. If the suppler were compelled to correct the invoice, such a correction could potentially be regarded in civil law as a waiver of the debt.

83In addition, the VAT Directive makes provision for the need to correct an invoice only ⁴¹ in the case where the supplier wishes to relieve itself of its tax liability under Article 203 of the VAT Directive. However, contrary to the opinion expressed by the Bulgarian tax authority at the hearing, Article 203 of that directive is not relevant here. It concerns only the case of incorrectly invoiced VAT, that is to say, VAT which is not legally due and which has been overstated on the invoice, as the Court recently made clear. ⁴² In this instance, however, the original invoices do not show an incorrect VAT amount. Neither the VAT amount nor the entire invoice issued by the supplier is rendered incorrect by the unilateral non-payment of the price by the recipient of the supply. The invoice does not therefore need to be corrected.

84Contrary to the opinion expressed by Bulgaria, this also distinguishes the present case from that underlying the Court’s decision in the judgment in Kraft Foods Polska. ⁴³ This concerned the question of reducing the taxable amount on account of discounts subsequently granted by the supplier. In that case, therefore, there was a change to the agreed consideration that must be shown on the invoice. It was in consequence appropriate to say there that proof of receipt of a corrected invoice may in principle be a potential condition for reducing the taxable amount under Article 90 of the VAT Directive. ⁴⁴

85A close reading of that decision, however, shows that the Court was primarily concerned with proof that the recipient of the supply had been informed [of the price reduction] in such a way as to enable it to adjust any deduction of input tax it had made, ⁴⁵ as the price which it owed was now lower on account of the discount. A recipient of a supply which has not paid its invoice, however, still owes the same price. It does not have to be informed of the foregoing. Neither does it have to be informed that it has deducted too much input tax (see point 90 just below), since it knows itself that it has not paid.

86Since it makes no sense to correct a correct invoice (even in the event of non-payment), the VAT Directive precludes an obligation to do so.

2. Need to notify the tax authority or the recipient of the supply?

87All that remains to be clarified, therefore, is whether the Member States, in transposing Article 90 of the VAT Directive, may provide that the taxable amount cannot be reduced in the event of non-payment before the recipient of the goods or services, provided that it is a taxable person, has been informed of this. This appears to be the purport of Question 5, since this expressly mentions the aim of those measures as being to adjust the deduction of input tax originally carried out by the recipient of the supply.

88The tax authorities – as described in the order for reference – in principle only ever wish to reduce the supplier’s taxable amount where the input tax deduction made by the recipient of the supply has previously been adjusted. The background to the question concerning Article 90 of the VAT Directive is therefore made up of the provisions of Article 184 et seq.. While Article 90 of the VAT Directive governs the right of a taxable person to reduce its taxable amount where, after the transaction has been concluded, it does not receive the consideration stipulated or receives only part of it, Article 185 of that directive concerns the adjustment of the deductions initially made by the other party to that transaction. Those two articles therefore represent the two sides of the same economic transaction. ⁴⁶

89Nonetheless, the conditions of correction laid down in Article 90 and Article 184 et seq. respectively of the VAT Directive are independent of each other. After all, they concern different taxable persons. ⁴⁷ Thus, ‘the fact that the VAT payable by the supplier of the taxable person would not itself be adjusted has no impact on the right of the competent national authority to require adjustment of the VAT deducted by a taxable person’. ⁴⁸

90That duty of correction on the part of the recipient of the supply arises completely independently of any potential notification by the supplier to the recipient of the supply and, as a rule, even beforehand, because – as I have already explained in more detail elsewhere ⁴⁹– the deduction of input tax is intended to relieve the recipient of the supply of the burden of VAT. ⁵⁰ If, however, as here, no payment has been made, the recipient of the supply does not carry the burden of VAT. The latter must, therefore, in accordance with Article 184 et seq. of the VAT Directive, correct its input tax deduction in a timely manner itself, if it does not wish to be accused of tax evasion.

91However, the reduction of the supplier’s taxable amount first enables the tax authorities to review the input tax deduction carried out by the recipient of the supply and, if appropriate, to make a correction as provided for in Article 184 et seq. of the VAT Directive. To this extent, therefore, notifying the tax authorities as part of the process of correcting the taxable amount in accordance with Article 90 of the VAT Directive is certainly helpful. Consequently, Article 90 of the VAT Directive would not preclude a further special duty on the part of the taxable person to notify the tax authorities. What we have here, however, is a duty to notify not the tax authorities but the recipient of the supply. ⁵¹

92In accordance with the principle of proportionality, such a duty to notify the recipient of the supply, as a condition under Article 90(1) of the VAT Directive, would have to be suitable for securing the attainment of the objectives pursued by that provision and could not go beyond what is necessary in order to do so. ⁵²

93A notification to the recipient of the supply that the supplier intends to reduce the taxable amount in accordance with Article 90 of the VAT Directive indicates that the latter did not receive the consideration for the supply after the transaction was concluded. However, the recipient of the supply knows itself that it has not paid, and that, for that reason, it is not entitled to deduct input tax. Consequently, such a notification acts at best as a reminder. It is not therefore suitable for securing the attainment of the objectives pursued.

94In the light of the little effort this requires of the supplier, the Court ⁵³ has nonetheless regarded an obligation to effect such a notification as being in principle proportionate. In its reasoning, however, the Court argued that the Member State must be enabled ‘to act in due time … to recover the VAT which could have been deducted as input tax by [the] debtor (that is, the recipient of the supply)’. ⁵⁴ How a notification to the recipient of the supply – who was not intended to be subject to any formal requirements – can enable the Member State to act in due time remains unexplained, however.

95Such a notification to the recipient of the supply is completely unsuitable for securing the attainment of the objectives pursued if a notification is no longer possible or is pointless, because, for example, the recipient of the supply has already been wound up following the conclusion of insolvency proceedings, has moved to an unknown address or has already adjusted its input tax deduction. What is more, informing the tax authority about the recipient of the supply concerned as part of the process of reducing the taxable amount is a suitable and more lenient means of enabling the tax authority to review and correct in due time the input tax deduction made by the recipient of the supply.

3. Interim conclusion

96A statutory obligation whereby the supplier must inform the recipient of the supply of the change made to the taxable amount in order to remind the latter of any change yet to be made to the input tax deduction is disproportionate because unsuitable for securing the attainment of the objectives pursued. Consequently, Member States may not lay down such an obligation in the context of Article 90 of the VAT Directive (answer to Question 5). What is more, an obligation to correct in advance a correct invoice infringes the VAT Directive (answer to Question 2).

E. Interest on a claim to a refund on account of a reduction of the taxable amount

97All that now remains to be clarified, therefore, is from what point interest is payable by the Member State on a claim to a refund arising from a justified reduction of the taxable amount. In the present case, CRG reduced the taxable amount in 2020, but is seeking interest retroactively to the year in which the invoices were issued (2006 to 2012).

98The principle of fiscal neutrality requires that the financial loss incurred on account of a refund of excess VAT not made within a reasonable period of time be compensated through the payment of default interest. ⁵⁵ The same is true in connection with the refund of VAT following from a reduction of the taxable amount for VAT pursuant to Article 90(1) of the VAT Directive. ⁵⁶

99As explained above (point 51 et seq.), in the absence of further detail on the applicable national law, a taxable person’s taxable amount may be reduced within a certain period of time. The decisive factor is the taxable person’s declaration of the point from which, in its view, non-payment can be assumed to be ‘definite’. That declaration is made in the course of the current tax assessment period and is not retroactive (see point 60 et seq. above.). Consequently, as the Bulgarian tax authority and the Commission have in effect rightly submitted, the payment of interest too may be prescribed only after that declaration.

100Before that point in time, the legal reason for the payment of VAT exists on the basis of Article 63 of the VAT Directive. This ceases to be the case only when definite non-payment becomes sufficiently likely (Article 90 of the VAT Directive). It therefore falls to the taxable person to communicate the end of that pre-financing and to claim a refund in the course of the tax assessment. From that point, the tax authority is aware of the reduced taxable amount and of its duty to pay a refund. In the event of non-payment thereof, it falls into arrears and must pay default interest.

101That solution also serves legal certainty, since it saves all of the parties a backward-looking dispute concerning the start of the payment of interest and, thus, the date of the initial ‘irrecoverability’, if the taxable person clearly saw no need to reduce the taxable amount at that time.

102Consequently, interest on a claim to a refund on account of a reduction of the taxable amount may not be made to become payable as soon as the supply has been completed or the invoice has been issued, for example (at which point payment was not yet uncertain within the meaning of Article 90 of the VAT Directive). Rather, it may be made to become payable at the earliest as from the point at which the supplier is able to assume that payment will no longer be made and has declared this in the course of the tax assessment (answer to Question 6).

VI. Proposed decision

Conclusion

103I therefore propose that the answers to the questions referred for a preliminary ruling by the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria) should be as follows:

Article 90 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax does not preclude an appropriate limitation period where this does not begin to run until the date on or after which the taxable person was able to reduce the taxable amount in the event of total or partial non-payment of the price. A limitation period which starts to run from when the supply is made or the invoice issued, however, is not compatible with Article 90 of that directive. If that date is not specified by law, a limitation period cannot begin to run until the date on which a likelihood bordering on certainty exists that the debt has become irrecoverable.

An obligation to correct a correct invoice as a condition for reducing the taxable amount in the event of non-payment of the price infringes Directive 2006/112.

The point from which a taxable person may reduce the taxable amount for the first time in the event of total or partial non-payment as provided for in Article 90(1) of Directive 2006/112 depends on the situation obtaining in the Member State concerned and the circumstances of the particular case, which it is for the referring court to ascertain. That said, the principle of neutrality prohibits a disproportionately long pre-financing of the tax, provided that the taxable person (the supplier) has taken reasonable steps to discharge its function as tax collector for the State. The latter always presupposes the issue of an unsuccessful request for payment (reminder) to the recipient of the supply. It does not, however, require unsuccessful court proceedings or the opening or conclusion of insolvency proceedings in respect of the assets of the recipient of the supply.

Article 90(1) of Directive 2006/112 is directly applicable where the Member State erroneously applies the option to derogate provided for in Article 90(2) of that directive, in that it fails to take into account the uncertainty of definite non-payment and instead excludes the right to reduce the taxable amount altogether.

A statutory obligation whereby the supplier must inform the recipient of the supply, in the event of its (total or partial) non-payment of the price, about the change of the taxable amount in order to remind the latter of any change yet to be made to the input tax deduction is disproportionate because unsuitable for securing the attainment of the objectives pursued. Consequently, Member States may not lay down such an obligation in the context of Article 90 of the VAT Directive.

Interest on a claim to a refund on account of a reduction of the taxable amount may be made to become payable at the earliest as from the point at which the supplier is able to assume that payment will no longer be made and has declared this in the course of the tax assessment.

¹ Original language: German.

² OJ 2006 L 347, p. 1, as last amended by Council Directive (EU) 2022/890 of 3 June 2022 amending Directive 2006/112/EC as regards the extension of the application period of the optional reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud and of the Quick Reaction Mechanism against VAT fraud (OJ 2022 L 155, p. 1).

³ Judgments of 3 July 2019, UniCredit Leasing (C‑242/18, EU:C:2019:558, paragraph 30), and of 27 June 2018, Varna Holideis (C‑364/17, EU:C:2018:500, paragraph 17 et seq.).

⁴ Judgment of 27 June 2018, Varna Holideis (C‑364/17, EU:C:2018:500, paragraph 27 et seq.).

⁵ See to this effect the judgment of 27 June 2018, Varna Holideis (C‑364/17, EU:C:2018:500, paragraph 31).

⁶ Order of 3 March 2021, FGSZ (C‑507/20, EU:C:2021:157, paragraph 20), and judgment of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 21), in relation then to the substantively identical predecessor provision.

⁷ Judgments of 11 November 2021, ELVOSPOL (C‑398/20, EU:C:2021:911, paragraph 28); of 11 June 2020, SCT (C‑146/19, EU:C:2020:464, paragraph 24); of 8 May 2019, A-PACK CZ (C‑127/18, EU:C:2019:377, paragraph 21); and of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 22); see also, similarly, the order of 3 March 2021, FGSZ (C‑507/20, EU:C:2021:157, paragraph 20), and the judgment of 22 February 2018, T-2 (C‑396/16, EU:C:2018:109, paragraph 36 et seq.).

⁸ Judgments of 12 October 2017, Lombard Ingatlan Lízing (C‑404/16, EU:C:2017:759, paragraph 38), and of 15 May 2014, Almos Agrárkülkereskedelmi (C‑337/13, EU:C:2014:328, paragraph 34).

⁹ Order of 3 March 2021, FGSZ (C‑507/20, EU:C:2021:157, paragraph 31), judgment of 15 October 2020, E. (VAT – Reduction of the taxable amount) (C‑335/19, EU:C:2020:829, paragraphs 51 and 52).

¹⁰ Judgment of 15 May 2014, Almos Agrárkülkereskedelmi (C‑337/13, EU:C:2014:328, paragraph 23), uncritically repeated in the judgment of 12 October 2017, Lombard Ingatlan Lízing (C‑404/16, EU:C:2017:759, paragraph 39).

¹¹ Judgments of 3 July 2019, UniCredit Leasing (C‑242/18, EU:C:2019:558), and of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887).

¹² See also to this effect the judgments of 11 November 2021, ELVOSPOL (C‑398/20, EU:C:2021:911, paragraph 38), and of 3 July 2019, UniCredit Leasing (C‑242/18, EU:C:2019:558, paragraph 65)).

¹³ Judgments of 3 July 2019, UniCredit Leasing (C‑242/18, EU:C:2019:558, paragraph 39); of 12 October 2017, Lombard Ingatlan Lízing (C‑404/16, EU:C:2017:759, paragraph 42); and of 15 May 2014, Almos Agrárkülkereskedelmi (C‑337/13, EU:C:2014:328, paragraph 37).

¹⁴ Order of 3 March 2021, FGSZ (C‑507/20, EU:C:2021:157, paragraph 23).

¹⁵ Order of 3 March 2021, FGSZ (C‑507/20, EU:C:2021:157, Rn. 23); see to this effect the judgments of 21 January 2010, Alstom Power Hydro (C‑472/08, EU:C:2010:32, paragraphs 16 und 17 and the case-law cited there), and of 12 April 2018, Biosafe – Indústria de Reciclagens (C‑8/17, EU:C:2018:249, paragraphs 36 and 37 and the case-law cited there).

¹⁶ Judgments of 11 November 2021, ELVOSPOL (C‑398/20, EU:C:2021:911, paragraph 25); of 6 October 2021, Boehringer Ingelheim (C‑717/19, EU:C:2021:818, paragraph 41); of 15 October 2020, E. (VAT – Reduction of the taxable amount) (C‑335/19, EU:C:2020:829, paragraph 21); of 2 July 2015, NLB Leasing (C‑209/14, EU:C:2015:440, paragraph 35); and of 3 July 1997, Goldsmiths (C‑330/95, EU:C:1997:339, paragraph 15).

¹⁷ See also expressly to this effect the judgment of 3 September 2014, GMAC UK (C‑589/12, EU:C:2014:2131, paragraph 31), and of 26 January 2012, Kraft Foods Polska (C‑588/10, EU:C:2012:40, paragraph 26).

¹⁸ The Court refers in its judgment of 13 March 2014, Malburg (C‑204/13, EU:C:2014:147, paragraph 43), to a principle of interpretation.

¹⁹ Judgments of 13 March 2008, Securenta (C‑437/06, EU:C:2008:166, paragraph 25), and of 1 April 2004, Bockemühl (C‑90/02, EU:C:2004:206, paragraph 39).

²⁰ Judgments of 13 March 2014, Malburg (C‑204/13, EU:C:2014:147, paragraph 41); of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 57); of 15 December 2005, Centralan Property (C‑63/04, EU:C:2005:773, paragraph 51)); and my Opinion in Centralan Property (C‑63/04, EU:C:2005:185, point 25).

²¹ See also to this effect the judgment of 24 October 1996, Elida Gibbs (C‑317/94, EU:C:1996:400, paragraph 23).

²² Judgments of 20 October 1993, Balocchi (C‑10/92, EU:C:1993:846, paragraph 25), and of 21 February 2008, Netto Supermarkt (C‑271/06, EU:C:2008:105, paragraph 21).

²³ See expressly to this effect, inter alia, the order of 3 March 2021, FGSZ (C‑507/20, EU:C:2021:157, paragraph 27), with reference to the judgment of 21 March 2018, Volkswagen (C‑533/16, EU:C:2018:204, paragraph 51) and to the judgment of 12 April 2018, Biosafe – Indústria de Reciclagens (C‑8/17, EU:C:2018:249, paragraph 44).

²⁴ Order of 3 March 2021, FGSZ (C‑507/20, EU:C:2021:157, paragraph 28 and the operative part).

²⁵ Order of 3 March 2021, FGSZ (C‑507/20, EU:C:2021:157, paragraph 19); judgments of 12 October 2017, Lombard Ingatlan Lízing (C‑404/16, EU:C:2017:759, paragraph 44); and of 15 May 2014, Almos Agrárkülkereskedelmi (C‑337/13, EU:C:2014:328, paragraph 39).

²⁶ The order of 3 March 2021, FGSZ (C‑507/20, EU:C:2021:157), inter alia, should probably be construed to this effect; see also the judgment of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraphs 27 and 28).

²⁷ Judgment of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 29).

²⁸ Judgment of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 27).

²⁹ Judgments of 6 December 2012, Bonik (C‑285/11, EU:C:2012:774, paragraph 42), and of 21 June 2012, Mahagében and Dávid (C‑80/11 and C‑142/11, EU:C:2012:373, paragraph 48).

³⁰ See to this effect, inter alia, the judgment of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 27).

³¹ See to this effect the judgment of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraphs 27 and 28).

³² A past example of this was a bank which settled the debts of tradespersons whose client had become insolvent in order to avert further damage to their reputation – see the case before the BFH, judgment of 19 October 2001 – V R 75/98, UR 2002, 217.

³³ Judgment of 29 March 2001, Commission v France (C‑404/99, EU:C:2001:192, paragraph 40 et seq.).

³⁴ Judgment of 17 September 2002, Town & County Factors (C‑498/99, EU:C:2002:494, paragraph 21 et seq.).

³⁵ Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 (OJ 2011 L 48, p. 1).

³⁶ See in this regard, inter alia, the judgment of 15 October 2020, E. (VAT – reduction of the taxable amount) (C‑335/19, EU:C:2020:829, paragraph 48).

³⁷ See, inter alia, the judgments of 6 December 2018, Tratave (C‑672/17, EU:C:2018:989, paragraph 35); of 12 October 2017, Lombard Ingatlan Lízing (C‑404/16, EU:C:2017:759, paragraph 42); and of 26 January 2012, Kraft Foods Polska (C‑588/10, EU:C:2012:40, paragraph 33).

³⁸ Judgments of 6 December 2018, Tratave (C‑672/17, EU:C:2018:989, paragraph 32); of 12 October 2017, Lombard Ingatlan Lízing (C‑404/16, EU:C:2017:759, paragraph 42); and of 15 May 2014, Almos Agrárkülkereskedelmi (C‑337/13, EU:C:2014:328, paragraph 37).

³⁹ Judgments of 6 December 2018, Tratave (C‑672/17, EU:C:2018:989, paragraph 33); of 12 October 2017, Lombard Ingatlan Lízing (C‑404/16, EU:C:2017:759, paragraph 43); and of 15 May 2014, Almos Agrárkülkereskedelmi (C‑337/13, EU:C:2014:328, paragraph 38).

⁴⁰ See, similarly, the order of 3 March 2021, FGSZ (C‑507/20, EU:C:2021:157, paragraph 19); judgments of 12 October 2017, Lombard Ingatlan Lízing (C‑404/16, EU:C:2017:759, paragraph 44); and of 15 May 2014, Almos Agrárkülkereskedelmi (C‑337/13, EU:C:2014:328, paragraph 39).

⁴¹ See the judgments of 18 June 2009, Stadeco (C‑566/07, EU:C:2009:380, paragraph 35); of 6 November 2003, Karageorgou and Others (C‑78/02 to C‑80/02, EU:C:2003:604, paragraph 49); of 19 September 2000, Schmeink & Cofreth and Strobel (C‑454/98, EU:C:2000:469, paragraph 49); and of 13 December 1989, Genius (C‑342/87, EU:C:1989:635, paragraph 18).

⁴² Judgment of 8 December 2022, Finanzamt Österreich(Wrongly invoiced VAT to final consumers) (C‑378/21, EU:C:2022:968, paragraph 26), with reference to my Opinion in the same case.

⁴³ Judgment of 26 January 2012, Kraft Foods Polska (C‑588/10, EU:C:2012:40).

⁴⁴ Judgment of 26 January 2012, Kraft Foods Polska (C‑588/10, EU:C:2012:40, paragraph 33).

⁴⁵ Judgment of 26 January 2012, Kraft Foods Polska (C‑588/10, EU:C:2012:40, paragraphs 32 and 41).

⁴⁶ See also to this effect the judgments of 15 October 2020, E. (VAT – Reduction of the taxable amount) (C‑335/19, EU:C:2020:829, paragraph 37), and of 22 February 2018, T-2 (C‑396/16, EU:C:2018:109, paragraph 35).

⁴⁷ Judgment of 15 October 2020, E. (VAT – Reduction of the taxable amount) (C‑335/19, EU:C:2020:829, paragraph 42, with express references to my Opinion in E. (VAT – Reduction of the taxable amount) (C‑335/19, EU:C:2020:424, points 58 to 60); see also, expressly, the judgment of 28 May 2020, World Comm Trading Gfz (C‑684/18, EU:C:2020:403, paragraphs 41 and 43).

⁴⁸ Judgment of 28 May 2020, World Comm Trading Gfz (C‑684/18, EU:C:2020:403, paragraph 41).

⁴⁹ See my Opinion in HA.EN. (C‑227/21, EU:C:2022:364, point 61 et seq.) and in Biosafe – Indústria de Reciclagens (C‑8/17, EU:C:2017:927, point 44 et seq.).

⁵⁰ See also the Opinion of Advocate General Campos Sánchez-Bordona in Volkswagen (C‑533/16, EU:C:2017:823, point 64).

⁵¹ The judgment of 6 December 2018, Tratave (C‑672/17, EU:C:2018:989, paragraph 38) also appears to have confused the two.

⁵² Judgments of 15 October 2020, E. (VAT – Reduction of the taxable amount) (C‑335/19, EU:C:2020:829, paragraph 47), and of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 25).

⁵³ Judgment of 6 December 2018, Tratave (C‑672/17, EU:C:2018:989, paragraph 40 et seq.).

⁵⁴ Judgment of 6 December 2018, Tratave (C‑672/17, EU:C:2018:989, paragraph 38).

⁵⁵ Judgment of 12 May 2021, technoRent International and Others (C‑844/19, EU:C:2021:378, paragraph 40), and of 14 May 2020, AGROBET CZ (C‑446/18, EU:C:2020:369), and of 28 February 2018, Nidera (C‑387/16, EU:C:2018:121, paragraph 25).

⁵⁶ Judgment of 12 May 2021, technoRent International and Others (C‑844/19, EU:C:2021:378, paragraph 41). See also my Opinion in technoRent International and Others (C‑844/19, EU:C:2021:58, point 31).