VAT Deduction Maintained Without Proof of Fraud in Unlawful Labor Supply Cases, Court Rules

• The court ruled that VAT deduction cannot be denied solely due to the reclassification of labor-intensive contracts as illicit labor supply, unless actual fraud is proven.
• The case involved a hotel company outsourcing services, with the tax authority alleging the contracts masked illegal labor supply and thus the VAT was non-deductible.
• The court found insufficient evidence of actual control over personnel or lack of business autonomy by the contractor, making the tax authority’s claims unsubstantiated.
• The court clarified that even irregular or illicit labor supply constitutes a taxable service for VAT purposes, and civil illegality does not automatically affect tax relevance.
• The right to VAT deduction remains if the service was actually provided, regardless of the contract’s legal classification, unless there is concrete evidence of fraud.

Source: eutekne.info

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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