An employee who uses his employer’s data to issue false invoices is obliged to pay the amount of VAT indicated in them, the Court of Justice of the EU in Luxembourg ruled on Tuesday.
The Tribunal dealt with a case from Poland. In the period from January 2010 to April 2014, an employee of a company based in our country, operating a gas station, issued 1,679 invoices that did not reflect actual sales transactions of goods, with a total value of approximately PLN 320,000. euro. For this purpose, she used the data of her employer, a value added tax (VAT) taxpayer, without his knowledge or consent.
She issued false invoices and obtained VAT refunds
The fraudulent invoices were not included in the company’s tax returns. They were used to obtain undue VAT refunds by the addressees of these invoices, and the appropriate tax was not paid to the state budget. As a result of the tax inspection, the competent authorities issued a decision determining the amount of VAT due from the company. According to the tax authority, activities constituting fraud were possible due to the lack of supervision and appropriate organization in the company that employed the employee.
The company appealed against this decision to the court, which in turn referred the complaint to the Court of Justice. The Polish court wanted to determine who is obliged to pay it: the company whose data was used illegally on the invoice, or the employee who used these data to issue false invoices.
The dishonest employee will pay the tax
The Tribunal ruled that “VAT cannot be due from the issuer of a false invoice appearing on the invoice if he acts in good faith and the tax authority knows the identity of the person who actually issued the invoice.” In such a situation, this person is obliged to pay VAT. “A different interpretation would be contrary to the purpose of the VAT Directive, which is to combat fraud, and to the fact that legal entities cannot invoke the norms of EU law in a way that constitutes fraud,” he explained. CJEU.
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