Total or partial non-payment of the price EU VAT case law

5 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 2011 to 2024.

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Provisions these cases interpret most

Article 90 of Directive 2006/112/EC Taxable amount · 4 of these cases
Article 11 of Sixth Directive 77/388/EEC Taxable amount · 1 of these cases

The 5 cases, most recent first

Under each case, what the Court decided, from its summary. The summaries are AI-generated and are not official documents: open the case for the Court’s own text.

C-314/22 Consortium Remi Group

Judgment · 29 February 2024 · Bulgaria

Bad debt relief, limitation periods, invoice correction and interest

A limitation period is permissible, penalising the insufficiently diligent, but it may only start when the taxable person could, acting diligently, assert the right to reduction. Absent national rules that starting point must be identifiable with reasonable probability. Requiring prior invoice correction and prior notice to the debtor is precluded where, absent specific national provisions, compliance is impossible in time for reasons beyond the taxable person's control. Refund carries default interest, running from when the reduction is claimed in the current period's return. Relevant wherever a Member State has used the Article 90(2) derogation but denies relief outright.

C-398/20 ELVOSPOL

Judgment · 11 November 2021 · Czechia

Bad debt relief and claims arising shortly before insolvency

Article 90 precludes such a condition where it is not ruled out that the claim may ultimately prove definitively irrecoverable. A blanket six-month cut-off bears no relation to how the claim is actually treated in the insolvency proceedings, so it does not address uncertainty of recovery under Article 90(2). Nor is it justified under Article 273. The timing of the claim alone raises no presumption of evasion, and forcing the creditor to bear unreceived VAT exceeds what is strictly necessary. Suppliers with Czech bad debt claims caught by the six-month rule have grounds to reopen refused adjustments.

C-507/20 FGSZ

Order · 3 March 2021 · Hungary

When the limitation period for bad debt relief starts to run

By reasoned order under Article 99, the Court held that where a Member State imposes a limitation period for asserting the right to reduce the taxable amount in respect of a definitively irrecoverable debt, that period must run from the date the debt became definitively irrecoverable, not from the date performance of the payment obligation was originally due. A diligent taxable person, here applying six days after the liquidator's finding, and absent abuse, cannot be deprived of the reduction. Article 90(1) has direct effect.

C-335/19 E. (VAT – Reduction of the taxable amount)

Judgment · 15 October 2020 · Poland

Bad debt relief and the status of debtor and creditor

Article 90 precludes all of those conditions. VAT registration of debtor or creditor is unconnected with whether non-payment is definitive, and symmetry with the debtor's input tax adjustment under Article 185(2) does not require either party to retain taxable status. Excluding relief pending the outcome of insolvency proceedings is disproportionate. A reasonable probability of non-payment, with upward re-evaluation if payment follows, suffices. Article 90(1) has direct effect and the conditions must be set aside even if other national provisions are affected. Suppliers with unpaid Polish invoices can claim relief notwithstanding the customer's deregistration, liquidation or insolvency, and notwithstanding their own loss of taxable status, relying directly on Article 90(1).

C-489/09 Vandoorne

Judgment · 27 January 2011 · Belgium

Bad debt relief under a single-stage tobacco tax label scheme

The Court held that those provisions do not preclude such legislation. Intermediate suppliers under the scheme neither deduct input tax nor owe output tax, so they have no VAT debt capable of refund. That the tax is economically included in the price they paid is irrelevant. Because the taxable amount is fixed by reference to the final retail price, non-payment does not reduce it, and a refund would affect tax revenue at the final consumption stage to a non-negligible extent. Confirms that bad debt relief is structurally unavailable to wholesalers and distributors within Member States operating tax label style single-stage collection for manufactured tobacco.