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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.


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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