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Company Liability for Blank Invoices: CJEU Ruling and Employer’s Due Diligence

  • The Court of Justice of the European Union ruled that a taxpayer is not liable to pay VAT on “empty invoices” issued by an employee without the knowledge and consent of the employer.
  • However, the employer will be liable to pay the VAT if they did not exercise due diligence to control the actions of the dishonest employee.
  • The case involved a company operating a petrol station that issued almost 1,700 invoices with a VAT amount that did not reflect the actual sales of goods.
  • These invoices were issued by a long-standing employee without the consent and knowledge of the company’s management.
  • The employee sold the invoices to other entities for the purpose of deducting VAT.
  • The tax authority argued that the company should pay the tax shown on the invoices because they did not exercise due diligence to avoid this practice.
  • The CJEU confirmed that the person responsible for paying VAT on an empty invoice may not always be the person named as the issuer on the invoice.
  • The court stated that a trader must take reasonable steps to ensure they are not involved in VAT fraud.
  • The employer would be liable for the payment of VAT if they failed to exercise due diligence in controlling the actions of their employee.
  • The CJEU concluded that in order to establish liability, it is necessary to determine whether the employer exercised due diligence in controlling their employee’s actions.


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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