Important Update from the Cypriot VAT Authorities – Courtesy of EY

Release of circular amending eligibility criteria for VAT recovery on bad debts

Refresher of the Case

As previously mention in an earlier newsletter, in the case of C-127/18, the Court of Justice of the European Union (CJEU) held that a taxable person can claim back VAT on unpaid customer balances which qualify for VAT as bad debts, even if the customer ceases to be VAT registered. This was contrary to the position of the Cyprus Tax Department.

Immediate response of the Cypriot VAT authorities

In a swift reaction, the Cypriot VAT Department acknowledged the aforementioned decision of the CJEU and proceeded with the release of Circular 234 (replacing previous Circular 204) to align the Cypriot VAT guidance with the EU Case Law in a timely manner.

For further information please click here:  circular-released-amending-eligibility-criteria-for-vat-recovery-on-bad-debts(1)