Our team has successfully represented one of the biggest agro-business conglomerates in the CIS countries before the Commission on Tax Disputes. The case concerned allegedly unpaid VAT of an amount exceeding EUR 3 million. The tax authorities claimed that intra-Community transactions of the taxpayer allegedly misapplied the VAT Triangulation simplification and VAT “safety net” rules.
The Commission ruled in favor of the client and agreed that the tax administrator had applied the VAT Triangulation simplification and “safety net” rule incorrectly, because these rules had not been explained in the light of the VAT Directive. Also, the Commission confirmed that the client had provided sufficient legal documents which proved that VAT had been applied in the Member States where the transportation of goods ended. Thus, the Commission agreed that this evidence was sufficient to prove that the client had correctly implemented the “safety net” provision and, therefore, those transactions could not be subject to VAT in Lithuania.
It was the first tax dispute where the national VAT Triangulation simplification and “safety net” rules were analyzed and explained in the light of the VAT Directive by the Commission on Tax Disputes.