Fraud in VAT: Employer’s Responsibility for Employee’s False Invoices

• An employee who uses their employer’s data to issue false invoices is responsible for paying the taxes mentioned in those invoices.
• This is true if the employer, who is subject to the tax, has shown reasonable diligence in controlling the actions of their employee.
• In a specific case, an employee in Poland issued 1,679 invoices that did not reflect actual sales, using their employer’s data without their knowledge or consent.
• These fraudulent invoices were used to obtain improper VAT refunds without paying the corresponding tax to the state budget.
• The tax authorities determined the amount of VAT owed by the employer after a tax inspection.
• The employer challenged this decision, and the national court has referred a question to the Court of Justice to determine who is responsible for paying the VAT mentioned in the fraudulent invoices.
• The Court of Justice states that the apparent issuer of a false invoice cannot be considered the debtor of the VAT when they act in good faith and the tax authorities know the true identity of the person who actually issued the invoice.
• The person who issued the invoice is responsible for paying the VAT in this situation.
• The employer must demonstrate reasonable diligence in controlling their employee’s actions to be considered acting in good faith and avoid being responsible for the VAT mentioned in the fraudulent invoices.
• If the employer fails to provide such evidence, they will be considered the person obligated to pay the VAT indicated in the fraudulent invoices.
• It is up to the tax authorities or the national court to assess whether the employer has acted with the required diligence based on all relevant factors.

Source: audiconsultores-etlglobal.com

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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