Invoice issued by a fictitious supplier

The invoice is the most important accounting document used in business transactions. Currently, it can be issued by anyone. Ready-made invoice forms are available without a problem - you can buy them at a job printing store or simply obtain them from free invoicing applications. However, more and more often you can come across invoices issued by a fictitious supplier.

Invoice issued by a fictitious supplier

Fictitious invoices are used by dishonest taxpayers to reduce income tax by entering fictitious expenses from these invoices as tax deductible costs. In this way, companies also extort VAT by deducting allegedly paid tax or by claiming its refund. In addition, this practice contributes to the marketing of goods from an illegal source.

An invoice that does not document actual sales between contractors has no legal basis, which means that it cannot have any tax consequences for both the issuer and the recipient of the invoice. The issuance of such an invoice and its use is a crime of tax fraud.

The purpose of a fictitious invoice is to make the transaction more realistic and to incur an expense in relation to the tax audit. Usually, its issuer is an entity that is a registered taxpayer and accounts for taxes. However, such an invoice cannot have the tax effects intended by the taxpayer.

The most vulnerable industries

Usually, false documents are used to inflate tax deductible costs, but the exception is the trade in scrap and fuels. In these industries, fictitious invoices are primarily used to market goods from an illegal source.

Another sector in which you can often come across such documents is construction services, as well as in the non-material services sector, e.g. marketing, training.

Effects of using fictitious invoices

The use of fictitious invoices for the purchase of goods or services causes the taxpayer to receive a false value of the input VAT. This can contribute to:

• illegal reduction of the tax burden in VAT,

• obtaining a refund of the excess value of input tax.

The second situation is possible only when the taxpayer shows a surplus of input VAT over output tax and applies to the Tax Office for its return.

Both of the above-mentioned situations can be achieved by submitting a tax declaration in the tax on goods and services. In this way, the provisions of Art. 56 and art. 57 of the Fiscal Penal Code.

Duty to prove guilt

Proving that the invoice is fictitious requires proving that the transaction documented by the given invoice did not take place. This obligation rests with the tax authorities. However, this is not a simple task as the inspection is usually carried out some time after the transaction. This makes it difficult to obtain evidence. On the other hand, the mere fact that the invoice issued by the contractor was not disclosed for the purposes of its own settlement or did not pay tax on it, is not enough to challenge the deduction or the cost of the invoice buyer.