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The VAT review for March 2024

Joao Martinho and Gary Barnett (Simmons & Simmons) review the latest VAT developments that matter.

Fraudulent invoices and VAT

In P sp. z o.o. v Dyrektor Izby Administracji Skarbowej w Lublinie (Case C‑442/22) the CJEU held that a business will not normally be liable to pay VAT shown on a VAT invoice fraudulently issued by one of its employees in its name unless the business failed to exercise the due diligence reasonably required to monitor the conduct of the employee.

The case involved a Polish company P. One of its employees PK created false VAT invoices in P’s name. PK then sold those false VAT invoices to other businesses which were able to claim input VAT (without having incurred the relevant amounts).

The Polish tax authority sought to recover the amounts fraudulently claimed as input VAT by purchasers of the invoices. However it was not...

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