Comments on ECJ C-418/22: A flat-rate fine of 20% of the VAT amount, due before the deductible VAT was credited are not precluded

• The Belgian company CEZAM has appealed against three decisions by the Belgian tax authorities, which imposed fiscal fines for CEZAM’s failure to submit periodic VAT returns for several years.
• CEZAM disputes the amount of the fines, which correspond to 20% of the amount of VAT that would have been due before deduction of the deductible VAT. CEZAM argues that such fines should be based on the amount of VAT actually due, after deduction of the deductible VAT, in accordance with the principle of proportionality.
• The CJEU has stated that national regulations imposing a flat-rate fine of 20% of the amount of VAT that would have been due before the deductible VAT was credited are not precluded by Article 273 of the VAT Directive, provided that the proportionality of the fine is verified by the referring court.

Source BTW jurisprudentie

See also

• Summary of ECJ C-418/22: National legislation can penalize failure to declare and pay VAT with a flat-rate fine of 20% of the VAT amount due, after deducting deductible VAT, as long as the fine is proportionate
• ECJ C-418/22 (Cezam) – Judgment -Authorities are allowed to impose penalties on underpaid VAT without considering input VAT

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