The principle of trust in the entrepreneur was decisive for winning against a tax authority

The principle of trust in the entrepreneur was decisive for winning against a tax authority

In 2016, the Head of the Tax Office initiated a tax audit regarding the correctness of VAT settlements with respect to our Client-Entrepreneur engaged in property development business. In the course of the audit, the authority of first instance questioned the right of the Taxpayer to reduce the output tax by the amount of the input tax on the basis of a purchase invoice issued by the contracting party to the Client for making the database available against payment. 

As a result of the proceedings, the authority of first instance made findings with which our Client disagreed. The Head of the Tax Office, on the basis of an analysis of the evidence collected, issued a decision unfavourable for the Client, refusing to refund VAT.  

As a result of an appeal prepared by attorney Krzysztof Topolewski and Wojciech Jankowski from the firm’s Tax Department, the Head of the Treasury Administration Chamber in Poznań overturned the decision of the authority of first instance and referred the case for re-examination. 

The Head of the Tax Office upheld the arguments put forward in the appeal, stating that the prerequisite for exercising the right to reduce output VAT by input VAT is the use of the purchased goods for taxable transactions. This right cannot be made conditional on the occurrence of other criteria. 

When reconsidering the present case, the authority of first instance decided to discontinue the proceedings, guided in its actions by the principle of trust in the entrepreneur.

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