Concurrent denial of VAT deduction and liability: article by Ondřej Málek on EPRAVO.CZ

In its judgment in the KONREO case, the Court of Justice of the European Union (CJEU) addressed a fundamental question: may a Member State simultaneously require a taxable person to pay unpaid VAT as a person liable for the tax and, at the same time, deny that person the right to deduct input VAT arising from the same transaction?

In his article, Ondřej Málek explains that the Court’s answer is unequivocal: yes, such a concurrent application is permissible where the recipient of the supply knowingly or negligently participated in a fraudulent chain. The denial of the right to deduct VAT and liability for unpaid VAT pursue different objectives and therefore do not exclude one another.

The article also outlines the impact of the judgment on Czech practice and explains why the Supreme Administrative Court confirmed that such an approach by the tax authorities is not disproportionate.

The full article by Ondřej Málek is available here.