- The abuse of law clause in VAT has been in effect since 2016 to combat tax evasion and tighten the tax system
- The clause is applied in cases like domestic supply of goods and services, export and import of goods, and intra-community acquisition and supply of goods
- Transactions that constitute an abuse of law are treated as taxable regardless of whether they meet the legal conditions and forms
- Abuse of law in VAT involves transactions that, despite meeting formal legal requirements, primarily aim to achieve tax benefits contrary to the purpose of the law
- The clause originated from EU case law, particularly the Halifax case, which involved complex contracts designed to gain tax advantages without economic motives
- Two criteria from the Halifax case help determine if an activity is an abuse of law
- The first criterion is objective, focusing on whether the activity, despite being formally correct, results in a tax benefit that contradicts the intent of the tax laws
Source: ksiegowosc.infor.pl
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.
