On April 15, 2021, the CJEU issued a significant ruling on Polish regulations regarding the possibility of imposing 20% sanctions on value added tax by tax authorities. In its judgment, the Court decided that these provisions (Article 112b (2) of the Act of 11 March 2004) are inconsistent with the standards of Directive 2006/112 / EC, to the extent that the sanction is applied without any distinction between situations, where a given irregularity is the result of an error, and the error does not show any features suggesting fraud or an attempt to underestimate the proceeds to the State Treasury, and situations where such special circumstances do not occur.
The CJEU ruling is the result of a preliminary question submitted by the Provincial Administrative Court in Wrocław, which debated whether the 20% sanction imposed in the event of a voluntary correction does not contradict Directive 2006/112 / EC and the principle of proportionality.
The crucial aspect of the settlement for taxpayers is the CJEU’s criticism of the situation in which automatic sanctions have been applied, regardless of whether the error is the result of a fraud or the incorrect settlement is the result of a mistake. For all entities that corrected incorrect VAT calculations in good faith, the issued ruling may provide strong support in disputes with tax authorities. Therefore, it is worth verifying the already completed proceedings and those that are still pending, in terms of whether it is possible to reimburse the VAT sanctions already paid (both the one in the amount of 20% and, in principle, also 15%), or use the CJEU judgment to strengthen the arguments on the current stage of the dispute.