On the 21st of June 2012. The Court of Justice of EU decreed fundamental resolution (on united cases C-80/11 and C-142/11), that while providing an answer to a great number of preliminary questions, sets forth the basis for the formation of case-law on the rules and practices of VAT refund. The trend towards creating such constant case-law is more than obvious in the resolutions of ECJ, as well as those of the Bulgarian Supreme Administrative Court (“SAC”). As examples may be considered those resolutions on cases C-324/11 from 6.10.2012 and C-273/11 from 6.10.2012 (part of the practice of ECJ), as well as resolution № 9375 from 28.06.2012 by (SAC) on adm. Case № 15425/2011 г., VIII о., reporter – judge Donka Chakurova, resolution № 9680 from 4.07.2012 by (SAC) on adm. Case № 15428/2011 г., VIII о., reporter – Judge Donka Chakurova, resolution № 9369 from 28.06.2012 г. by (SAC) on adm. Case. № 13480/2011 г., VIII о., reporter – judge Emilia Kaburova and resolution № 9603 from 3.07.2012 by (SAC) on adm. Case. № 10749/2011 г., VIII о, reporter– Judge Svilena Prodanova (part of SAC’s case-law)
Nevertheless many unclear issues still remain. Probably both the magistrates of ECJ and SAC from now on should clarify most of the concepts and principles in the resolutions above. One thing is certain – the emerging and increasingly visible case-law on the administration’s right to refuse or limit the VAT refund will force tax officials to act completely different. They will have to gather serious and indisputable evidence to refuse the right of deduction and not just limit itself to reveal “objective impossibility” for the realization of supply. A fundamental change of methodology in revision due to implementation of Law of Value Added Tax must be applied. Upon application of the latter the CEO of the National Revenue Agency must issue Instruction, in that may set those practices so that the audit procedures to approach even slightly to European levels.
