Comments on ECJ C-331/23: EU Court Upholds Belgium’s Joint Liability in VAT Fraud Fines Case

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