A landmark victory in a due diligence case

MDDP won the due diligence case before the Voivodship Administrative Court. It included an appeal in cases concerning a company from the metallurgy and scrap metal trade, and in its ruling the Voivodship Administrative Court stated that:

  • it is not true that a taxpayer has more possibilities to verify contractors than state authorities, his role is to secure business risk,
  • the fact that a VAT fraud took place does not mean that no supply was performed – the taxpayer must be proven that there was no transfer of the right of the owner to dispose of the goods to deprive them of the right to deduct input tax
  • the fact of ongoing contacts with a person other than the business owner who does not present the authorization is not equivalent to failure to exercise due diligence,
  • the role of Polish tax authorities is not to replace foreign fiscal authorities – a confirmed export of goods to another EU country is sufficient to apply the 0% rate even if the recipient is an entity other than the one indicated on the invoice.

The theses presented by the Voivodship Administrative Court present a ground-breaking approach of courts to carousel frauds.