Adjustment of VAT in the event of bankruptcy of the beneficiary

According to Law 30/2019, the taxable amount is adjusted if the value of the delivered goods or services can not be recovered as a result of the bankruptcy of the beneficiary or following the implementation of a reorganization plan admitted and confirmed by a court order, whereby the creditor’s claim is changed or eliminated.

Adjustment is permitted from the date of delivery of the court decision to confirm the reorganization plan and in the event of the bankruptcy of the beneficiary, starting with the date of the sentence or, as the case may be, of the conclusion by which the bankruptcy was decided according to the insolvency law. The adjustment shall be made within 5 years from 1 January of the year following the one in which the Court decision, confirming the reorganization plan, was pronounced, respectively the one in which the bankruptcy was decided by a sentence. If the bankruptcy took place before January 1, 2019 and the final / definitive and irrevocable court decision for insolvency proceedings has not been delivered by this date, the adjustment shall be made within 5 years from January 1, 2019. Adjustment is permitted even if the reserve for subsequent verification has been cancelled in accordance with the Fiscal Procedure Code.

By making the adjustment, the reserve of the subsequent verification for the tax period in which the value added tax chargeable for the operation subject to adjustment is re-opened. If after the tax base adjustment the amounts for the respective receivables are collected, the adjustment which has been made is accordingly cancelled, depending on the amounts received, by the tax period in which they are received.