Due diligence may determine the amount of VAT sanctions

Changes proposed in Slim VAT 3

The currently applicable provisions of the VAT Act on VAT sanctions do not provide for solutions that would allow tax authorities to discretionally reduce such a sanction depending on the reason for the arrears. As a result, the amount of the sanction may be the same both when an error in the settlements was made by a taxpayer who acted diligently and in the case of a taxpayer who did not exercise due diligence in VAT settlements or knowingly committed fraud. Projected changes resulting from the so-called Slim VAT 3 are to change that. Provisions were introduced to enable the heads of the tax office to discretionally set the percentage of VAT sanctions, which are to be up to 15%, 20% and 30% respectively. The amount of the actually determined sanction will depend, inter alia, on from the circumstances,

Source Deloitte

See also C-935/19 (Grupa Warzywna) – Provisions on the possibility of imposing a 20% VAT sanction by tax authorities do not comply with the provisions of the VAT Directive

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