French Court Denies VAT Deduction for Companies Linked to Supplier Tax Fraud, May 2025 Ruling

• The Nantes Administrative Court of Appeal ruled that a company cannot deduct VAT if it knew or should have known its purchases were part of a fraud.
• JNL Automobiles bought exclusively from suppliers whose manager also worked at JNL and who failed to meet tax obligations.
• The court held that JNL was required to take precautions to ensure its suppliers properly paid VAT.
• The decision emphasizes the need for businesses to verify the tax compliance of their commercial partners.
• Systematically requesting a tax compliance certificate may be a practical solution.

Source: easytax.co

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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