In connection with the ruling of the CJEU of October 15, 2020 in case C-335/19, the conditions entitling to the use of the bad debt relief have changed. Currently, it is possible if:

1) the claim has not been settled / sold within 90 days from the date of its payment deadline

and

2) the creditor as of the day preceding the date of submitting the tax return, in which the adjustment is made, was a taxpayer registered as an “active VAT” taxpayer.

The fact of being a creditor or debtor in the restructuring, bankruptcy or liquidation proceedings is irrelevant for the use of this relief. The debtor also does not have to be an active VAT payer at the moment of initiating this procedure.

Moreover:

1) the deadline for using the bad debt relief procedure is 3 years from the date of issuing the invoice documenting the debt, counting from the end of the year in which it was issued;

2) it is possible to use this procedure also in the case of debtors who are natural persons (consumers) or VAT taxpayers being exempt from tax subjectively, provided, however, that:

a) the claim will be confirmed by a legally valid court decision and directed to enforcement proceedings

or

b) the claim is entered in a debt register maintained at the national level

or

c) consumer bankruptcy has been declared against the debtor pursuant to separate regulations.