188体育

The third and final limb (VATF52300) of the Kittel principle (VATF52200) is the need to show that the taxable person 鈥榢new or should have known鈥� that his transaction was 鈥榗onnected with fraudulent evasion of VAT鈥� (dealt with in VATF53100, VATF53200 and VATF53300).

The ECJ judgement in Kittel does not define what is meant by 鈥榢new or should have known鈥� but does state that it is an objective test.

As the transactions are being traced (VATF33500) and all evidence is being collected, you should be looking to gather evidence in relation to the 鈥榢new or should have known鈥� limb, such as:

• evidence of the taxable person鈥檚 general knowledge of fraud at the time the transactions took place (VATF53430, VATF53435 and VATF70000);
• features of the nature of the transactions that would have lead the taxable person to question whether they were 鈥榗onnected with fraudulent evasion of VAT鈥� (VATF60000); and
• due diligence and risk assessment carried out by the taxable person to identify and address the risks identified (VATF70000).

The following sections look at:

• the meaning of 鈥榢new or should have known鈥� in relation to corporate entities (VATF53410);
• whether a taxable person 鈥榢new鈥� (VATF53415);
• whether a taxable person 鈥榮hould have known鈥� (VATF53420, VATF53425 and VATF53430);
• contrivance (VATF53435), and
• when a taxable person relies on a third party (VATF53440)