15/01/2009 (Agence Europe) - The Polish system that sanctions mistakes made in VAT declarations, does not consist of a double tax whammy incompatible with Community law. The European Court of Justice reached this conclusion in its ruling of 15 January (C-502/07). Polish law imposes fines in the event of overvalued demands for VAT rebates, and fines correspond to 30% of the over-evaluation. The Court recognises that the fine should be a percentage of the given amount but do not display characteristics of VAT. There is therefore no double taxation or infringement of the sixth VAT directive (77/388/EEC of the Council). The case was sent back to Naczelny S¹d Administracyjny (Adminstrative Court in Voïvodie Bydgoszcz), which means a rejection of the appeal lodged by the Polish K-1 company against a fine it had had imposed on it for excessive VAT rebate demands for May 2005. (C.D./transl.rh)