Adjustment of Input Tax Post-Recovery – Article 56 – VAT Executive Regulations

Article 56 – Adjustment of Input Tax Post-Recovery

1. If Input Tax has been recovered because it was attributed to supplies as specified in Clause 1 of Article 54 of the Decree-Law but, before the consumption of the Goods or Services upon which that Input Tax was incurred, the Input Tax became not so attributable, then the Taxable Person shall be required to repay that Input Tax.
2. If Input Tax has not been recovered because it was not attributed to supplies specified in Clause 1 of Article 54 of the Decree-Law but, before the consumption of the Goods or Services upon which that Input Tax was incurred, the Input Tax became attributable to supplies as specified in Clause 1 of Article 54 of the Decree-Law, then the Taxable Person shall be able to recover Input Tax attributable to the use of the Goods or Services for making such supplies.
3. If Input Tax has been treated as subject to apportionment to calculate the Input Tax that could be recovered, but before the consumption of the Goods or Services upon which that Input Tax was incurred, the use of that Input Tax changes, then it shall be adjusted as follows:
   1. If it becomes attributable to supplies as specified in Clause 1 of Article 54 of the Decree-Law, then the Taxable Person shall be able to recover Input Tax not previously recovered to the extent that it is attributable to the use of the Goods or Services for making such supplies.
   2. If it ceases to be attributable to any supplies specified in Clause 1 of Article 54 of the Decree-Law, then the Taxable Person shall be required to repay that Input Tax.
4. The adjustments for change in use of Goods or Services under this Article shall be made only if all of the following conditions are met:
   1. The change in use occurred within five years of the Date of Supply of the relevant Goods and Services.
   2. The Taxable Person is not required to adjust the same Input Tax under mechanisms provided in Articles 55 and 57 of this Decision, in which case those mechanisms will apply.