Companies unwittingly party to carousel fraud are entitled to reimbursement of input VAT paid

Luxembourg, 13/01/2006 (Agence Europe) - Companies unwittingly party to carousel fraud are entitled to reimbursement of input VAT paid. 'Carousel fraud' consists of a chain of supplies of goods in which a VAT defaulting trader is involved. In a press release, the Court of Justice explains in connection with joined cases Optigen

, Fulcrum Electronics and Bond House Systems (exporters of computer chips) against the Commissioners of Customs and Excise in the UK (the companies unwittingly became party to carousel fraud) that 'the right of a taxable person who carries out transactions to deduct input VAT cannot be affected by the fact that in the chain of supply of which those transactions form part, without that taxable person knowing or having any means of knowing, another prior or subsequent transaction is vitiated by VAT fraud.' The chip companies' claims for repayment of VAT were rejected in the UK.