On 8 May 2013, the Court of Justice of the European Union (CJEU) gave its decision in the case of Hristomir Marinov (Case C-142/12) where a provision of the Bulgarian VAT legislation was found to contradict Directive 2006/112/EU (the VAT Directive).
Under Bulgarian law, on removal from the VAT register a taxable person is deemed to perform a VAT-able transaction, the taxable amount of which is the open market value of the assets in existence at the time of removal from the register.
The CJEU ruled that such a provision infringes Art. 74 of the VAT Directive under which the taxable amount of such a transaction should be the value of the assets determined at the time of the VAT deregistration, which therefore takes into account any change in the value of those assets between their acquisition and the deregistration.
This ruling may require changes in the Bulgarian legislation to achieve conformity with the VAT Directive. In the meantime, taxable persons may rely on the direct effect of Art. 74 should a dispute with the Bulgarian revenue authorities occur.