VAT carousel and VAT due diligence
It's easy to get involved, harder to get out of.
What is a tax carousel?
Tax carousel transactions are transactions within a network of a few, a dozen (less often several dozen) entities that create the appearance of legal commercial transactions, and their real purpose is to obtain a VAT refund that was not paid at an earlier stage of the turnover. In order to make their practice credible, criminals often try to get involved in a carousel (i.e. at some stage) of legally operating entrepreneurs.
They will recover VAT and dissolve into thin air, and you will be left with the "bill" from the tax office for payment (because only you managed to catch it ...).
You can become a prosecuted economic criminal completely by accident and not know it for months.
What can you do?
Depending on what stage you are at, you can:
Implement a procedure aimed at demonstrating due diligence in verifying contractors, which is to demonstrate that, acting on the basis of the means available to you, you will properly verify contractors. Thus, you cannot be considered consciously participating in the tax carousel, and therefore your VAT settlements cannot be questioned.
If the tax authority has initiated or is conducting proceedings in this regard, it is better that you are not alone on this battlefield. They have a better tool and they know how to approach you to show you guilt.
What is the VAT procedure?
Remember that the tax office likes papers. The procedure defines the method of verification of contractors and is a proof of your due diligence (if you wanted to defraud VAT, you would not create procedures to avoid getting involved in a carousel, right?). This position is confirmed by the administrative courts. So it's worth having such an ace up your sleeve.
The mere fact of having the procedure is evidence in your favor. Why? Because the basis for depriving a taxpayer of the right to deduct input VAT is his improper diligence in verifying the reliability of his contractors and the circumstances related to transactions carried out with them (which has already been confirmed by Polish courts, but in particular by the Court of Justice of the EU).
Having the procedure proves to the tax authorities that you exercise due diligencein order to avoid becoming entangled in a VAT carousel.
The VAT procedure prepared by us is tested and working solution, which was created on the basis of the jurisprudence of tax authorities and administrative courts, judgments of the Court of Justice of the EU and explanations of the Ministry of Finance.
Could it be worse?
Tax authorities may bring criminal proceedings against you for VAT fraud. Do you know that there is a penalty of 25 years in prison for defrauding VAT exceeding PLN 10 million. For the murder of a man, standard up to 15 years ...
We fight on behalf of clients in such cases.
From the point of view of the tax office, it is important to end the case with the arrangements, and not to discover the entities that make up the tax carousel (although they rarely do it too).
For the tax office, translations from the "I did not know" cycle, "they looked like a legally operating company", "after all, they delivered this product. How could I know? " these are not translations.
Unfortunately, even if you did not know you were involved in a scam, the Tax Office assumes that you would have guessed it had you exercised due diligence ...