Dranken Van Eetvelde: joint and several liability in full — but only against a chance to exculpate

CJEU, judgment of 12 December 2024 — C-331/23, Dranken Van Eetvelde, ECLI:EU:C:2024:1027 · Full text (PDF)

The case

Dranken Van Eetvelde NV, a Belgian wholesale and retail drinks trader, was served with an enforcement order dated 10 December 2018 following a VAT audit of 2011: EUR 173,512.56 in back tax (of which EUR 141,665.30 under joint and several liability), plus fines of EUR 347,000 and EUR 283,320 — each at 200% (para. 9). The allegation: a system of false invoicing under which goods went not to the customers named on the invoices but to café, hotel and restaurant operators, enabling them to sell drinks “off the books” (paras 10, 12). The liability rested on Article 51bis(4) of the Belgian VAT Code: joint and several liability of a taxable person who, at the time of his transaction, knew or should have known that VAT in the chain would go unpaid with intent to evade (paras 6, 29).

In parallel, criminal proceedings concerning 2012 to 2014 ended in 2019 with a fine of EUR 20,000 (para. 12). The Court of First Instance of East Flanders asked the Court of Justice: does an “unconditional” joint liability, with no judicial assessment of each party’s contribution to the fraud, infringe Article 205 of the VAT Directive and proportionality? Must the principal debtor’s input VAT deduction reduce the liability? And does Article 50 of the Charter (ne bis in idem) bar the combination of an administrative penalty (2011) with a criminal conviction (2012-2014) (para. 16)?

The court’s key reasoning

No strict liability — and a rebuttable presumption. The Court reaffirms the ALTI standard: Article 205 of the VAT Directive permits recourse against a third party who knew or should have known that the tax would remain unpaid; presumptions are permissible provided they are not practically impossible to rebut and no “system of strict liability” arises; traders who take every measure that can reasonably be required of them must be able to rely on the lawfulness of their transactions (para. 26). On that footing, the Belgian provision does not create strict liability, because it requires knowledge or constructive knowledge (para. 30). What matters is rebuttability (para. 31) — and here the Court formulates the sentence that carries the judgment: to rebut the presumption, the taxable person concerned must be able to prove “that he has taken every measure which could reasonably be required of him to ensure that the transactions which he carried out were not part of a fraud scheme involving false invoices” (para. 32).

Full liability with no apportionment by contribution. It follows from the very nature of joint and several liability that each debtor is liable for the entire amount (para. 33); grading the obligation by share of responsibility would frustrate effective collection and would be particularly difficult in opaque fraud structures (para. 35). The person held liable may therefore be pursued alone for the whole amount “irrespective of the degree of his involvement” (para. 36) — civil-law recourse between the debtors remains unaffected (para. 37).

No transfer of the input VAT deduction. In fraud cases the principal debtor himself must be refused the deduction; the right to deduct therefore cannot — a fortiori — be transferred to the person held jointly liable (para. 45). Noteworthy is the incidental widening of the Kittel formula: refusal extends to a person who “at the very least facilitated” a transaction connected with evasion (para. 43).

Ne bis in idem: tax years divide the facts. The combination of an administrative penalty (2011) and criminal proceedings (2012-2014) does not fail under Article 50 of the Charter, because the facts are not identical (“idem”): even where one and the same evasion scheme is at work, the proceedings concern “different tax periods” (para. 54); that national criminal law would treat the conduct as a single continuing offence with a common intent is “irrelevant” (para. 55). The fourth question — proportionality of cumulating sanctions where the facts genuinely coincide — was thus expressly left unanswered (para. 58).

Where the decision sits in the case-law

The judgment carries three lines forward. First, the liability line from ALTI (CJEU, judgment of 20 May 2021 — C-4/20): Article 205 supports national joint-liability models, but only with a fault element and a rebuttable presumption. Secondly, the Kittel line (CJEU, judgment of 6 July 2006 — C-439/04 and C-440/04) as restated in Finanzamt M (CJEU, judgment of 24 November 2022 — C-596/21): knowledge or constructive knowledge as the ground of attribution, now with the added notion of “facilitating” (para. 43). Thirdly, the ne bis in idem line from Menci and bpost (CJEU, judgments of 20 March 2018 — C-524/15 and of 22 March 2022 — C-117/20): splitting the “idem” by tax period structurally weakens protection against double prosecution in tax matters, because tax offences are almost always organised by period.

For German law the decision connects at two points. It concerns, in substance, the same attribution model that section 25f of the VAT Act (UStG) implements at the level of exemption and deduction and section 71 of the Fiscal Code (AO) implements at the level of liability — and it confirms that proof of reasonable precautionary measures is the exculpation route guaranteed by EU law. The later decision in C-158/25 (CJEU, judgment of 16 July 2026) adds the procedural flank: a third party made to answer for another’s tax must be able to challenge the underlying findings effectively.

The literature

Wäger reads the decision as confirmation that liability “is not limited to the extent of one’s own contribution”, but stresses the mandatory opportunity to prove all reasonable measures — and remarks pointedly that the Court’s use of the notion of no-fault liability seems out of place (Wäger, UR 2025, 81 [110]). The defence-side critique of the consequences hits the judgment’s core: Vobbe/Pötters demonstrate that the CJEU declines to cap the consequences at the actual tax loss and thereby accepts an over-recovery that contradicts the German understanding (Vobbe/Pötters, UR 2023, 777 [781]). Reiß objects to the entire refusal-and-liability line as irreconcilable with the VAT’s design as a tax on consumption and with proportionate, guilt-based sanctioning — the appropriate instrument being liability (such as under section 71 AO), not cumulative multiple burdens (Reiß, UR 2020, 408 [415 et seq.]). On the de facto reversal of the burden of proof inherent in constructive knowledge, which the Belgian presumption technique sharpens further: Heidner, in: Bunjes, UStG, 24th ed. 2025, § 25f para. 9; Spilker, UR 2023, 589 (590).

Three levels — kept strictly apart

Official ruling: Read in the light of proportionality, Article 205 of the VAT Directive does not preclude a national joint-liability provision under which the court cannot assess the individual contributions to the evasion — provided the taxable person held liable is able to prove that he took every measure which could reasonably be required of him to ensure that his transactions were not part of the evasion (operative part 1). The principal debtor’s input VAT deduction does not reduce the liability (operative part 2). Article 50 of the Charter does not preclude combining criminal penalties with administrative penalties of a criminal nature for offences of the same kind committed in successive tax years, prosecuted in different proceedings (operative part 3).

Administrative practice: There is no express administrative provision. The German VAT Application Decree (UStAE) contains no implementation of the decision; German VAT law currently has no general joint-liability rule equivalent to Article 51bis(4) of the Belgian VAT Code.

Our conclusion for the defence: In our assessment, para. 32 is the operative core — and at the same time the EU-law blueprint for what a documented VAT control framework must deliver: proof that every reasonably required measure was taken. A trader who can produce that proof rebuts the knowledge presumption; a trader who cannot is, on this line of authority, liable for the full amount — with no discount for a minor contribution and no credit for another party’s input VAT. At the same time, para. 58 leaves a flank open: where the facts genuinely coincide (same tax year, same conduct), the proportionality of cumulating sanctions remains undecided. That is our own evaluation, not a statement of the judgment.

Defence levers

• Build the exculpation record: documented, transaction-level verification and control measures (customer and supplier checks, document consistency, escalation notes) are, under para. 32, the route out of joint liability guaranteed by EU law — the presumption must remain rebuttable (para. 31).
• Attack the basis of the presumption: the authority must establish knowledge or constructive knowledge at the time of the trader’s own transaction (paras 29 et seq.); generalised chain or sector suspicion does not carry liability.
• Keep the “facilitating” extension narrow: the formula in para. 43 stems from the input VAT refusal line; its shapeless extension to liability cases should be met with the proportionality proviso of paras 23 et seq.
• Check the periods: where administrative and criminal proceedings concern the same period and the same material conduct, ne bis in idem remains fully available — Dranken Van Eetvelde decides only the constellation of different tax years (paras 54, 56).
• Secure internal recourse: civil-law apportionment of the economic burden by contribution remains possible (para. 37) — document early against whom recourse may lie.

Defence assessment: NEUTRAL · Keywords: Article 205 VAT Directive, joint and several liability, rebuttable presumption, proof of measures, ne bis in idem, over-recovery

FAQ

Source box

Decision: CJEU, judgment of 12 December 2024 — C-331/23, Dranken Van Eetvelde, ECLI:EU:C:2024:1027 (Ninth Chamber; Advocate General Kokott, Opinion of 5 September 2024).

Literature: - Wäger, UR 2025, 81 (110) (full joint liability; proof of measures; critique of the “no-fault” label). - Vobbe/Pötters, UR 2023, 777 (781) (no cap at the tax loss; conflict with the prohibition of over-recovery). - Reiß, UR 2020, 408 (415 et seq.) (incompatibility with the VAT’s design; liability instead of cumulative refusal). - Heidner, in: Bunjes, UStG, 24th ed. 2025, § 25f para. 9 (de facto reversal of the burden of proof through circumstantial evidence). - Spilker, UR 2023, 589 (590) (reversal of the burden of proof; precautionary measures as the way out).

Related decisions: CJEU, judgment of 20 May 2021 — C-4/20, ALTI; CJEU, judgment of 6 July 2006 — C-439/04 and C-440/04, Kittel and Recolta Recycling; CJEU, judgment of 24 November 2022 — C-596/21, Finanzamt M; CJEU, judgment of 20 March 2018 — C-524/15, Menci; CJEU, judgment of 22 March 2022 — C-117/20, bpost; CJEU, judgment of 16 July 2026 — C-158/25 (dossier).