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A City Council has enquired whether it can recover VAT following the termination of a contract for the acquisition of a property due to a breach of conditions. The DGT has ruled that the termination of the transaction allows for the modification of the taxable base and the rectification of the VAT amount.
This ruling clarifies that when a contract is terminated due to breach, the resulting adjustments to the transaction value allow for the issuance of credit notes to correct the VAT previously declared.
The tax team reviews your specific situation.
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