1. **Subject of the dispute:** Challenging a tax notification-decision by which value-added tax was additionally assessed to an enterprise due to the alleged lack of reality of business transactions with a contractor.
2. **Court’s arguments:**
– The court emphasized that, for the confirmation of a tax credit, the key factor is the fact of the actual movement of assets, and not merely the existence of primary documents, which, moreover, were not challenged by the regulatory authority in terms of their form.
– The Supreme Court confirmed that the mere fact of the existence of criminal proceedings against a counterparty is not automatic evidence of the unreality of transactions in the absence of a court verdict.
– The tax authority failed to prove that the taxpayer acted unreasonably or without due diligence when choosing a counterparty, which, at the time of the transactions, held the status of an active VAT payer.
– The lack of a sufficient number of employees or equipment at the counterparty does not indicate the impossibility of performing the work, as the law allows for the engagement of subcontractors or the leasing of resources.
– The court applied the doctrine of individual liability: a bona fide taxpayer should not bear negative consequences for violations committed by its counterparties if the taxpayer itself was unaware of such violations.
– **Legal Position:** The court confirmed that the Grand Chamber of the Supreme Court has departed from its previous position, according to which the status of a “fictitious” enterprise automatically nullifies the legality of all its transactions, since the concept of “fictitiousness” has no clear definition in legislation, and the legal capacity of such entities is not terminated automatically.
3. **Court decision:** The Supreme Court upheld the decision of the appellate instance, by which the tax notification-decision was recognized as unlawful and revoked.
