Towards a Neutral and Effective VAT Treatment of Bad Debt Relief

The EU VAT Directive contains a mechanism for VAT bad debt relief. Member States may set conditions for such bad debt relief. The conditions that are being applied differ per Member State. Moreover, some Member States apply overly onerous conditions. The authors analyse the conditions to bad debt relief and call for action to simplify and harmonize so that a fairer, more balanced and more neutral system for bad debt relief can be achieved.