Right to Use Tax Credit

In the recent years a trend is observed of intensifying tax control over businesses, which in view of the terms and work load of the revenue authorities led to establishing a lasting practice of not recognizing the reality of transactions between counterparties and the right of use of tax credit. As a result, the number of administrative and court disputes for establishing the exact amount of tax liabilities, for recognizing and refunding of Value Added Tax (VAT) to businesses has considerably increased.

The VAT legal framework and the operation of the VAT system is extremely dynamic, in view of its current harmonization across the European Union (EU). The different approaches of national authorities in the already established single European framework, the applicable rules for proving the reality of transactions, recognizing of the right of use of tax credit and the procedures before the domestic tax authorities are subject of consideration by the European Court of Justice in Luxemburg and the European Court of Human Rights, Strasbourg.

These peculiarities require significant experience and knowledge not only of the matter of domestic and Community legislation but also of interpretations given in response to references for preliminary rulings. The PM&P team boasts long experience in procedural representation and defense of clients in tax disputes, in the procedures of appeals against incorrect reports of the revenue authorities (setting off and refund statements, audit reports). The law firm has been successfully representing its clients in cases of denied right to tax credit and financial result adjustments under the Corporate Income Tax Act, related to deliveries in the territory of the country and within the EU.

PM&P consulted in the past, and is presently providing consultancy on tax matters to many clients, including Bosch, Siemens, AIG Capital, Alcoa, Willi Betz Group, Coca-Cola Hellenic Bottling Company, Immo Finanze, Meggle AG, Advent International, Titan Cement, Knauf, etc.

It is important to note that the company also has experience  in providing comprehensive consultations including planning of tax effects of sophisticated transactions, restructurings and management of costs of resident and nonresident persons aiming at optimization of their results and effective use of tax credit. This is of significant importance in the process of implementation of business and investment activities of our clients.



Penkov, Markov & Partners offers “strict, correct and professional advice” to an impressive collection of financial services clients … Managing Partner Vladimir Penkov is praised by clients for his “commercial and pragmatic” approach.“