- The FTT upheld HMRC’s denial of VAT zero-rating on PAP Solutions’ EU sales under the Mecsek-Gabona principle, finding PAP knew or should have known the transactions were linked to VAT fraud by customers.
- The tribunal also dismissed the company’s penalty appeal and the personal liability notice issued to its sole director, Dr Apostolos Papadopoulos.
- HMRC accepted the goods were physically exported and the export documents were in order; the issue was solely PAP’s knowledge (or constructive knowledge) of fraud in the supply chain.
- The FTT found there was a tax loss caused by VAT fraud in the chain and concluded the evidence showed PAP actually knew about the fraud.
- In the alternative, the FTT indicated that even if PAP did not know, it should have known, and had not taken every reasonable step to prevent its participation.
Source: claritaxnews.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.
