The imposition of a VAT sanction without distinguishing whether the taxpayer’s error is due to fraud is incompatible with the VAT Directive

On April 15, 2021, the Court of Justice of the European Union (CJEU) issued a judgment favorable to taxpayers. The Court ruled that the Polish provisions on the possibility of imposing a 20% VAT sanction by tax authorities do not comply with the provisions of the VAT Directive to the extent that they apply regardless of the circumstances under which the irregularity results.

Source PwC