If the tax administrator concludes that a VAT payer has even indirectly been involved in VAT fraud (typically, by having accepted a delivery affected by fraud), the entitlement to VAT deduction will be withheld from the payer. The payment of additional VAT and related default interest and penalties represents an unexpected expense for the payer, with a significant financial effect on their business. According to the latest case law of the Supreme Administrative Court (SAC), proven involvement in VAT fraud may even endanger any waivers of penalties relating to additionally assessed tax.
Source: KPMG CZ
