B Law & Tax
07 February 2024

Tax Advisor: Legal implications and EU guidelines on VAT responsibility

The European Union Court of Justice has issued a ruling in case C-442/22, related to VAT fraud. Specifically, the dispute arose between January 2010 and April 2014 when an employee of a company in Poland, operating a gas station, issued over 1,600 invoices that did not reflect actual sales of goods.

The total value of these invoices amounted to approximately 320,000 euros in Polish currency. The employee used her employer’s data, a VAT taxpayer, without their knowledge or consent, and the fraudulent invoices were not included in the company’s tax returns. However, the recipients received an undue tax refund without the corresponding amount being paid to the public treasury.

VAT Responsibility: Legal Implications and EU Guidelines

Tax authorities, following an inspection, determined the VAT owed by the company, and the tax administration considered that the fraudulent actions were possible due to a lack of supervision and proper organization within the company. The company contested this decision before the national court, which sought a preliminary ruling from the EU Court of Justice. In particular, it aimed to determine whether the person mentioned in the invoice as the VAT debtor, according to the VAT Directive, was the company whose data were unlawfully used in the invoice or the employee who issued the false invoices using said data.

Invoicing Responsibility

The EU Court of Justice establishes that the VAT debtor cannot be the apparent issuer of a false invoice if acting in good faith, and if the tax administration knows the identity of the actual issuer of the invoice, that person will be responsible for the VAT. Interpreting otherwise would go against the objective of the VAT Directive to combat fraud and prevent litigants from abusing EU rules fraudulently.


Furthermore, it clarifies that, to be considered acting in good faith, the employer must demonstrate reasonable diligence in controlling the actions of their employee to prevent the misuse of their data to issue false invoices. In the absence of this evidence, the employer will be deemed responsible for the VAT indicated in the fraudulent invoices. The tax administration or the national court must assess whether the employer acted with such diligence.

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