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VATupdate Newsletter Week 42 2024

THUMB’S UP

In today’s fast-paced digital world, the way we communicate is constantly evolving. In an earlier newsletter I mentioned the history of emojis. These are used for expressing emotions in short messages, and you see them pop-up in emails, blogs and social media. In professional documents, you don’t see them very often. But a farmer in Canada was sued for using one.

Recently, a Canadian court ruled that a simple thumbs-up emoji could be legally binding in a contract. In this case, a Canadian farmer faced legal action for not delivering flaxseed as agreed, following a contract discussion conducted via SMS. When the grain buyer sent the contract and asked for confirmation, the farmer responded with a thumbs-up emoji, which led to a legal dispute over whether this emoji signified agreement to the contract.

The court ultimately ruled that the emoji, in this context, served as a valid form of acceptance, stating that modern communication methods, including emojis, must be recognized in legal proceedings. While this ruling might sound unconventional, it highlights the importance of adapting to the evolving ways people communicate today. It’s a case that may set precedent for future disputes involving digital interactions.

The case illustrates a broader principle, especially relevant for VAT. In VAT disputes, the formality of the agreement (whether written, verbal, or digital) often takes a backseat to the underlying facts. It’s not about the signature itself, but rather whether the parties agreed to the essential terms. This reflects a key VAT concept: “substance over form.” In both VAT and general contractual law, it’s the intention and facts that matter most, regardless of how they’re communicated.

Just like in the Canadian case where a thumbs-up emoji created legal consequences, in VAT, it’s crucial to get the facts right, not just the paperwork. If you don’t provide all the details or make decisions based on incomplete information, it could lead to costly mistakes. So, whether you’re agreeing on tax terms or settling a deal, ensure you’re crystal clear—because even a thumbs-up could turn into a hefty VAT liability.

For the latest news on VAT, check out www.vatupdate.com!

If you have any comments, questions, or ideas that you want to share with us, please send us an email at [email protected] or leave a comment under the posts of this newsletter on LinkedIn.


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