Blank invoices – VAT fraud

April 18, 2023

The concept of the so-called blank invoices appears repeatedly in reports of thwarted VAT fraud attempts. Unfortunately, the problem of fake invoices applies not only to entities that deliberately seek to defraud the state treasury. It is quite a common phenomenon in case of companies that neglect their duties by issuing invoices for sales that never took place. What are blank invoices? How can you protect yourself from the negative consequences of blank invoices?

What is a blank invoice?

A blank invoice, also often referred to as a fictional invoice, is a document issued in an unreliable manner, i.e. inconsistent with the actual state. Most of the time, this is the case when: 

• there was no economic event at all (supply of goods, provision of services),
• the transaction took place, but the supplier/service provider is a different economic entity than the issuer of the invoice (of which the buyer knew)
• the invoice issuer is the so-called firmant, and the economic entity that actually made the delivery or provided the service is concealed from the buyer

Why are blank invoices issued?

Blank invoices are issued  for unlawful fiscal gains. Such a document may be used to unlawfully reduce the amount of due VAT or to unjustifiably increase tax costs.

A blank invoice and VAT

The problem of blank invoices in the context of VAT should be considered both from the point of view of the issuer of such a document (seller) and the entity that receives such a document (buyer).

• If the taxpayer issues a blank invoice, he or she  is obliged to pay the tax indicated in such a document. It does not matter that the actual service has not been performed or that no delivery of the goods has taken place.
• However, if the buyer receives a blank invoice, he or she has no right to deduct the input tax shown in it – this results directly from art. 88 sec. 3a point 4 of the VAT Act.This provision indicates one of the most important rules that taxpayers should follow when making a decision to use the right to deduct VAT – that is verifying whether the invoice documents a real economic event, i.e. whether the services indicated in the invoice were actually performed and the goods were delivered.

Failure to comply with such due diligence may result in VAT arrears, as well as penal and fiscal liability. If you accidentally issued a blank invoice, you must immediately:

• cancel the invoice
• correct the invoice (if you failed to cancel the blank invoice).

Tags blank invoice, vat