Comments on ECJ C-121/24: Non-payment of declared VAT does not constitute VAT fraud

• Non-Payment of VAT Not Considered Fraud: Advocate General Kokott stated that the mere non-payment of declared VAT by a supplier does not automatically constitute VAT fraud. In the case of Vaniz EOOD, the knowledge or assumption that Stars International EOOD would not pay the declared VAT does not impose liability on Vaniz unless there is evidence of abuse.
• Context of the Dispute: Vaniz EOOD, a transport company, deducted VAT charged by Stars, which was later found not to be paying the declared VAT. The Bulgarian tax authorities held Vaniz liable based on the presumption that it should have been aware of Stars’ non-payment.
• Conditions for Liability Under VAT Directive: The Advocate General clarified that under Article 205 of the VAT Directive, a customer can only be held liable if they knew or should have known that their supplier was committing fraud or if they were engaging in abusive practices themselves. In Vaniz’s case, without evidence of such abuse, liability for the VAT non-payment cannot be established.

Source Taxlive

See also

• ECJ C-121/24 (Vaniz) – AG Opinion – Joint VAT liability requires existing debtor; no liability post-liquidation – VATupdate

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