Supreme Administrative Court overturns VAT dispute ruling

The Supreme Administrative Court has overturned a ruling that denied a business owner the right to deduct VAT on food purchases. The dispute originated from 2018 transactions where tax authorities questioned the legitimacy of the suppliers listed on invoices, accusing the entrepreneur of being involved in tax fraud.

Tax authorities had previously ruled that the entities on the invoices were not the actual suppliers, leading to additional tax liabilities. However, the Supreme Administrative Court ruled in favor of the entrepreneur, noting that even a diligent business owner may not detect well-hidden fraud. The court emphasized that private companies lack the investigative tools and oversight capabilities held by state authorities.

The court also noted that the transactions followed typical market patterns, with appropriate pricing and payments made via bank transfers. Furthermore, similar transactions with the same contractors in 2017 had been previously verified by tax authorities without issue, providing no reason for the entrepreneur to doubt subsequent purchases.