The Court of Justice of the European Union (CJEU) issued a judgment holding that the Polish regulations that allow for penalties or sanctions to be imposed at a rate of 20% in the form of an additional value added tax (VAT) liability were incompatible with EU law.
According to CJEU, imposing a 20% penalty on a real estate purchaser that erroneously reported a transaction as taxable and deducted input tax (whereas the transaction should have been entirely exempt from tax) was not consistent with the provisions of the VAT Directive and the resulting principle of proportionality.
The case is: Grupa Warzywna Sp. z o.o. v. Dyrektor Izby Administracji Skarbowej we Wrocławiu, C-935/19 (15 April 2021)
Source: KPMG
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