Lithuanian Court Rules on VAT Fraud: Missing Traders, Due Diligence, and Tax Deductibility

• The Supreme Administrative Court of Lithuania ruled that companies UAB X and UAB Y committed VAT fraud as “missing traders” using forged documents and failing to pay declared VAT.
• The applicant was found to have known or should have known about their participation in the VAT fraud chain due to lack of due diligence.
• UAB X and UAB Y were newly established with minimal resources and activity, and the applicant failed to verify the identities of supplier representatives.
• The court emphasized that expenses in fraud cases must be supported by legally valid documents, which Company S lacked, leading to rejection of the substance over form principle.

Source: vatabout.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.

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