VAT adjustment for destroyed goods

VAT adjustment for destroyed goods

Question:
Hello!

I am the owner of a transport company transporting goods from Bulgaria to Romania. The goods are manure loaded from a plant in Bulgaria. In Romania, the truck crashed due to the driver. The goods are 100% destroyed - there is a document from the police. My CMR insurance covers the value of the destroyed goods, according to a document submitted by the factory to my insurer without VAT. The factory also issues an invoice to me for the value of the goods and VAT included. And now the factory requires me to pay only the value of the VAT on this invoice, citing item 79, paragraph 1 of the VAT Act. My question is: do they have grounds to demand that I pay the difference coming from the VAT, do they have the right not to issue me a Credit Notice to this invoice?

Thanks in advance!

Answer:

Hello,

The main point in your case is that the plant believes that it must make an adjustment to the tax credit according to Art. 79, para. 1 of the VAT Act for the scrapping of the goods and accordingly this VAT must be refunded. In our opinion, however, according to Article 80, para. 2, item 2 such adjustment should not be made and accordingly the plant will not refund VAT to the state budget. Moreover, even if the plant still considers that they have to make this adjustment according to Art. 79, para. 1 (I emphasize something we do not agree with), then this is not a reason for them to issue you an invoice. From there, it is a matter of understanding and contractual relationship between you and your client, whether you owe any kind of penalty (other than the insurance that has been paid) and in what amount.

We hope we have been helpful to you.

Greetings!