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VAT – exercise of due care
Exercising due care in VAT settlements primarily involves verifying the counterparties and the nature of transactions. Tax authorities expect businesses to take reasonable steps to ensure that they are not involved, whether knowingly or unknowingly, in tax fraud, including VAT carousel schemes.
In practice, this obligation includes, among other things, verifying the reliability of suppliers, reviewing the course and documentation of transactions, and monitoring unusual or atypical trading conditions. Although not explicitly defined in the VAT Act, failure to exercise due care can lead to serious consequences, such as denial of the right to deduct input VAT or assessment of tax liabilities.
Paczuski Taudul assists clients in developing and implementing internal procedures that demonstrate and ensure the exercise of due care in VAT settlements, thereby significantly reducing the risk of adverse financial consequences.
Our offer
Our services include, in particular:
- auditing the current level of compliance with the standards of due care in VAT settlements;
- selecting and tailoring appropriate methods and procedures for implementing due care standards, taking into account the nature and scale of the enterprise;
- drafting internal procedures that define the standards for exercising due care, including, for example, counterparty verification methods;
- developing an action and documentation model that demonstrates that the adopted due care procedures are properly implemented and followed within the organisation.
Szymon Raut
An expert in VAT and the implementation of the National e-Invoice System. He advises clients in the financial, electronics, manufacturing, retail, and nonprofit sectors.