- The Supreme Court has ruled that the fear of embezzlement is not sufficient to limit the exercise of the rights of defense.
- In this case, the principle of defense under EU law was violated, and therefore, the additional tax assessments must be cancelled. The interested party,
- X BV, trades in flowers and applies the zero rate for ICLs to flower deliveries.
- A due diligence was initiated for alleged VAT fraud in Hungary, and a prejudgment attachment was levied on X BV’s bank balances.
- The inspector imposed additional VAT assessments on X BV, which were immediately paid by the recipient. X BV did not agree with these additional assessments, and the District Court of Noord-Holland ruled that the principle of defense had been violated and annulled the additional tax assessments.
- However, the Amsterdam Court of Appeal ruled that the principle of defense had not been violated due to the fear of embezzlement.
- The Supreme Court concluded that the EU law principle of defense had been violated and that the additional tax assessments must be quashed.
Source Taxlive
