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Practical Handbook VAT 2021

Cases of uncollectible credits and declaration of bankruptcy

The modification of the tax base due to bad debts made by taxable persons who are not covered by RECC, will give rise to the right to deduct the tax paid by the debtor taxable person covered by that special scheme in respect of the modified transactions that are still pending deduction.

On the other hand, the declaration of bankruptcy of the taxpayer covered by RECC or of the recipient of its transactions will determine, on the date of the declaration of bankruptcy, the accrual of the amounts charged and the deduction of the amounts borne in respect of the transactions to which the RECC has been applied, which are still pending accrual or deduction.