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Bulgaria ECJ ruling on incorrectly levied VAT

  • Apr 12, 2013 | Richard Asquith

Bulgaria ECJ ruling on incorrectly levied VAT

The European Court of Justice last week passed down its ruling on a recent Bulgarian Value Added Tax case.  The case relates to the right for a VAT refund on incorrectly charged Bulgarian VAT.

The case concerns the sale of used trucks by a Spanish VAT registered business to a Bulgarian business.  The acquirer had treated the purchase as an intra-community supply, and applied the reverse charge.  However, there had been a significant delay on entering the transaction in the VAT return.  The Bulgarian authorities ruled that the input was not allowed, and there was an interest charge on the output element of the VAT sale.  The delay was partially because the Bulgarian company had not been VAT registered, and had to complete a voluntary VAT registration.

The European Court of Justice, the highest court of appeal with EU VAT matters, has now ruled that in the interests of VAT neutrality, the Bulgarian business should be able to include the VAT output, and therefore avoid the late VAT penalty.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.