VAT Deduction Cannot Be Refused Without a Concrete Finding of Falsity

Council of State, 9th Chamber (reversal)

The assessments with threefold tax loss penalties made against the client company I represent, on the allegation of using false documents, failed judicial review.

For the invoices of 2021 based on genuine deliveries of goods, it had not been clearly established to whom the sales had been made, nor had any concrete finding been made that these invoices were false. Although the company had clearly shown, in the tax technique and audit reports, its authorisation to trade fuel between distributors in the sector, its purchases and its activities, an assessment with penalty had been proposed by way of interpretation.

Judicial review looks beyond interpretation; it demands evidence and concrete findings. The 9th Chamber of the Council of State reversed the decision of the regional administrative court, clearly stating that the tax deduction cannot be refused without a definite finding of falsity and that invoices based on genuine deliveries of goods cannot be arbitrarily disregarded.