The amendment to the Act on Value Added Tax with effect from 01.01.2021 introduces the possibility of correcting the tax base and tax on uncollectible receivables.

The right to VAT refund in the event of total or partial non-payment of the claim arises after the statutory conditions have been fulfilled. The law defined an uncollectible claim, set out the procedure for correcting the taxable amount and defined the obligations of the taxable person in relation to the correction of the tax base. You can correct the tax base and tax in the following cases:

  1. Claims against the debtors in executory proceedings
  2. Claims against the debtors in bankruptcy proceedings
  3. Claims against the debtors in relieving their debts
  4. Claims against the debtors who ceased to exist without the legal successor
  5. Claims not exceeding 300 Euro including the VAT

The supplier will be able to apply for an adjustment of the tax base for a maximum period of three years. The supplier will be obliged to issue a corrective document to correct the tax base.

At the same time, the amendment to the Act introduces an obligation for a customer who has not paid for that supply and has exercised the right to deduct tax. Such a customer will be obliged to return all or a proportion of the vat deducted, in the amount of the unpaid equivalent.

The introduction of the VAT refund mechanism also required changes to the tax return and the control statement. Therefore, a new VAT return and a new control statement template come into force, with effect from 01.01.2020