A Dutch company addressed invoices including VAT to its subsidiary. During an audit, it was established that, according to his own general ledger, the supplier did not report nor pay that VAT. The tax authorities therefore claimed for the payment of the VAT and imposed penalties.
As the subsidiary did deliberately not deduct the charged VAT, the supplier questioned his VAT liability and the level of the penalties.
It was actually disputed before the Supreme Court (“Hoge Raad”) whether it was the intention of the supplier to have failed to pay the invoiced VAT and, if that question was answered in the affirmative, whether the penalty imposed was appropriate.
Source: vatdesk.eu
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