Adjustment of Deductions in Case of Capital Goods – Revocation of the VAT Number

Journal
Author
Șvidchi, N.
Country
European Union; Romania
Published Date
Issue
International VAT Monitor 2022 (Volume 33), No. 5
FormatPDF
EUR
45
| USD
50 (VAT excl.)

The ECJ judgment in S.H. v. Administraţia Judeţeană a Finanţelor Publice Sibiu and Direcţia Generală Regională a Finanţelor Publice Braşov addresses the Romanian legislation and the corresponding practice of the tax authorities under which taxable persons with a revoked VAT number, based on national provisions enacted to counter abusive practices, are denied the right to deduct the VAT related to capital goods. In this article, the author explains that the denial of the deduction right is final and is made through a proportional negative adjustment, based on an irrefragable presumption that the capital goods are not used for the purpose of economic activities.