Abstract

The tax law abuse principle authorises tax administration bodies to question transactions that are consistent with the literal wording of the regulations on the basis of regulations of the Act on Value Added Tax. In practice, this principle is an instrument for tax ­authorities, established in order to eliminate the possibility of obtaining unreasonable tax advantages associated with avoidance of tax obligations by taxpayers. The purpose of this paper is to present the law abuse principle as a behaviour contrary to the commercial and social objective of the VAT deduction right. The authors stress that the tax bodies, while evaluating the collected evidence from the point of view of justification for the reduction of the due tax referred to in Article 88(3a)(c) of the Act on Value Added Tax, should take into account the actual course of the transaction and apply the law abuse principle only in situations aiming at VAT payment avoidance.