Tax customs & excise /

Additional liability in VAT does not conform with the European Union Law – ruling given by CJEU

On 15 April 2021 the CJEU gave a ruling in the case C935/19 concerning the conformity with the European Union law of the provisions of the VAT Act within the scope of additional tax liability imposed by the authority under Article 112b of the VAT Act.

The CJEU has indicated that in accordance with the directive member countries of the EU may adopt the regulations which counteract tax frauds; however, the sanction should be imposed on the basis of the circumstances of the case. In accordance with the Polish regulations the sanction established at the level of 20% of the overstated amount of the surplus, the lowered tax cannot be lowered correspondingly to  existing circumstances. Thus it is applied irrespective of whether a mistake happened as a consequence of a fraud or as a result of other circumstances. This means that the sanction is applied automatically.

In connection with the above the CJEU has stated that the national provisions are not in conformity with the European Union law. On the basis of the given judgment taxpayers have been given the possibility to recover the amounts of sanctions imposed by the authorities. Nevertheless, each and every case should be analyzed taking into consideration the circumstances connected with imposing the sanctions.

Author team leader DPG Tax
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