- The Court of Justice of the European Union ruled on the case Dranken Van Eetvelde NV v. Belgian State, validating Belgium’s practice of imposing joint liability for VAT fraud
- The court also upheld the compatibility of heavy fines, up to 200%, with Union law
- This ruling contrasts with the earlier opinion of the Advocate General who criticized the Belgian measures as disproportionate and contrary to European principles
- Belgian VAT law allows for taxpayers to be held jointly liable for the VAT debts of third parties if they knew or should have known about the non-payment
- The case involved Dranken Van Eetvelde NV, where VAT fraud was detected involving false invoices for beverage deliveries to horeca establishments
- The fraud allowed these establishments to sell beverages without recording sales, evading taxes
- Although Dranken Van Eetvelde NV had declared the VAT correctly, they were still held liable for their customers’ unpaid VAT, leading to a 200% fine
- The company appealed, arguing the joint liability and fines were disproportionate since they were not directly involved in the fraud
- The Court of Justice was asked to assess the compliance of Belgian regulations with the VAT Directive and the principle of proportionality
- Key legal principles questioned included the principle of proportionality, the principle of neutrality, and the ne bis in idem principle from the EU Charter
Source: vat-consult.be
See also
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