ECJ: Employer Liable for VAT When Employee Issues Fake Invoices

• The European Court of Justice ruled that an employee using their employer’s details to issue fake invoices is liable for VAT incurred.
• The employer is only liable if they have exercised due diligence to monitor the employee’s conduct.
• The case involved a petrol station where staff created fake invoices for fuel supplies that never actually took place.
• The fake invoices were used to obtain an undue refund of VAT without paying the corresponding tax.
• The ECJ stated that VAT cannot be payable by the apparent issuer of a fake invoice if they are acting in good faith and the tax authority is aware of their identity.
• The employer must prove that they have exercised due diligence to prevent their details from being used for fake invoices.
• If the employer fails to prove due diligence, they are obligated to pay the VAT indicated on the fake invoices.

Source: blogs.pwc.de

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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