Knowledge group: VAT paid in the event of fraud is only deductible via write-down of claim against scammer

• Entrepreneurs cannot deduct VAT paid to a scammer from their profit, as this payment does not qualify as an allowable business expense.
• Instead, the entrepreneur holds a claim against the scammer, which may be considered for write-off against profit.
• The nature of the payment (single or multiple) does not affect the non-deductibility of the VAT in cases of fraud.

Sources

• Taxlive
• Taxence