The case deals with the situation where an employee of a municipality instructed suppliers to send invoices for goods and services to X. Then X received a request from the employee to pay the suppliers’ invoices and issue a new invoice (with a mark-up) to the municipality. The employee took care of the order confirmation from the municipality and determined which description X should state on the invoice. The municipality paid X’s invoices.
Afterwards it turned out that the suppliers supplied the goods and services to the employee privately. X had no contact with the suppliers and did not know what products or services the suppliers’ invoices related to. Contact with the suppliers went through the employee.
The Court agrees with the tax inspector that X was not the recipient of the goods and services, and therefore was not allowed to deduct the input VAT charged by suppliers. This would still be the case if X didn’t know or wasn’t involved in the fraud committed by the employee of the municipality.