VAT FRAUD – HOW CAN YOU PROTECT YOUR BUSINESS? With the ever-changing pace in business and emerging markets, VAT Fraud is becoming more prevalent. The European Court of Justice in a number of cases concerning VAT fraud has held that:
a taxable person who knew or ought to have known that, by his purchase of goods, he was party to a fraudulent transaction can have his right to deduct related input credits refused;
a taxable person who knew or ought to have known that the transaction carried out was part of a tax fraud committed by the purchaser may be denied the right to zero-rate the intra-Community supply to that purchaser.