Court – Evidence Justifying Involvement in a VAT Fraud Circuit

• SAS Sidmat, a munitions/ball-trap equipment reseller, purchased goods through an inactive company (SARL France Cartouches) — which had ceased activity since June 2016 — yet continued receiving invoices from a Spanish supplier, with Sidmat paying the invoices and France Cartouches re-invoicing Sidmat without remitting any collected VAT to the Treasury.
• The Court upheld the denial of VAT deduction, relying on a cluster of objective indicators: invoices issued to an inactive entity, payment by the claimant, shared ownership and family ties between the companies, joint accounting, and the artificial invoicing circuit — establishing that Sidmat “knew or could not have been unaware” of the fraud.  [juricaf.org]
• Key takeaway: The burden of proof lies with the tax authorities (per CJEU Mahagében, C-80/11), but when clear red flags exist (inactive supplier, family/capital links, shared bookkeeping), the acquirer has a duty to verify its supplier’s fiscal compliance.

🔗 External sources:

• Juricaf – Full Decision Text (FR) [juricaf.org]