The Greek Tax Administration has issued Circular letter No. 1080/2017, confirming that VAT on bad debts is not recoverable in most situations. The tax administration explains that only in very limited cases can VAT corresponding to transactions that have been declared bad debts become deductible, such as when the debtor has been declared in bankruptcy by a court as part of the procedure established by the Insolvency laws of Greece. For all other cases, the taxpayer can only write off its bad debts as an income tax expense; in that process the taxpayer must include the VAT due on those bad debts.
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