Judgment;Summary — ECLI:EU:C:2025:554
Date: 2025-07-10
Language of the case: Czech
Court formation: Eighth Chamber
Procedure: Reference for a preliminary ruling
Origin: Czechia

summary, 
as of that day, additional VAT was validly assessed (due to the denial of the right 
to a tax deduction) both on VERAMI and on FAU. That is not affected by the fact 
that the applicant lodged an action and subsequently also an appeal in cassation 
challenging the subsequent assessment of tax on FAU. As of the decisive date, 
there was a final decision on a subsequent tax assessment on FAU. At the time 
when the defendant decided for the second time about the appeals against the 
notices to the guarantor, asking FAU to pay the tax not paid by VERAMI, a final 
decision of the Financial Administration denying FAU the right to a tax deduction 
on identical business transactions already existed. Hence, FAU was called upon to 
pay tax to the public treasury in the place of VERAMI, which it had already paid 
to that company once before, when paying its invoices. The tax with respect to 
which FAU is the guarantor, was calculated in the invoices issued by VERAMI, 
as the supplier, for FAU, as the customer. FAU paid the invoiced amounts to its 
supplier, VERAMI. FAU was denied the right to a tax deduction on those 
invoices, due to the fact that there was VAT fraud in the chain of trade. 
6 The Brno Regional Court annulled the defendant’s decision of 26 May 2020 and 
returned the case to it for fresh consideration on the grounds of disproportionate 
steps taken by the Financial Administration in deciding whether to apply the 
liability. Essentially, that amounts to the double taxation of a single commercial 
transaction. FAU’s liability de facto doubles FAU’s own tax obligation, based on 
the denial of its right to a deduction. The purpose of the liability, however, is to 
ensure that the public treasury does not suffer prejudice, rather than to punish a 
taxable person. 
7 The defendant filed an appeal in cassation challenging the judgment of the 
Regional Court, claiming that the purpose of the VAT deduction mechanism is to 
uphold the principle of tax neutrality. That principle, however, cannot be invoked 
by a person who deliberately participated in tax fraud. In such cases, the Financial 
Administration is obliged to deny the deduction claimed. The purpose of the 
denial of the tax deduction is not to collect the missing tax but, rather, it preserves 
the purpose and meaning of Council Directive 2006/112/EC on the common 
system of value added tax. The Financial Administration is entitled to deny the 
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right to a deduction to all members of a chain of trade if they knew or could have 
and should have known that tax fraud is involved. It is not limited to collecting the 
missing tax. Furthermore, involvement in tax fraud cannot be rectified by a 
subsequent payment of the missing tax. It is necessary to distinguish between 
FAU’s tax obligation and its guarantor obligation that secures the payment of the 
tax by its supplier. The essence of the liability obligation lies in securing the 
payment of the tax due from another entity. The outcome of the application of 
liability is the satisfaction of a treasury claim from the debtor (the guarantor’s 
supplier) who has failed to pay the tax. Denial of a tax deduction results in 
preventing unjust enrichment on the part of a taxable person involved in tax fraud. 
Denial of a right to a deduction is not a special rule in relation to liability. Hence, 
nothing prevents both rules being applied with respect to a single taxable person, 
that is to say, the denial of a claim to a tax deduction on a taxable transaction 
received that was affected by tax fraud and liability for the payment of tax by the 
supplier with respect to the same taxable transaction. The application of both rules 
is based on similar assumptions (fraudulent conduct in a chain of trade and the 
absence of good faith of the taxable person in respect of the legality of its 
transactions). Their coinciding is therefore a logical consequence. It would be 
paradoxical if liability were to concern only those entities that claim a tax 
deduction in good faith in respect of the legality of transactions undertaken by 
them. 
8 In its statement concerning the appeal in cassation, the applicant stated that denial 
of the right to a deduction and liability must be understood as alternative 
procedures. Their simultaneous application breaches the principle of tax neutrality 
and the equal treatment of tax entities. On the basis of the defendant’s decisions 
challenged by the action, FAU is to pay VAT on the same transaction three 
times – first it paid it to its supplier, second it ‘paid it’ due to the denial of the 
right to a deduction of the tax, and now it is to pay it for a third time in the form of 
liability for the payment of tax by its supplier. The purpose of the denial of the 
right to a deduction and of liability is to protect the public treasury. However, it 
suffices to apply only one of the rules. The objective of the Financial 
Administration’s actions cannot be the maximum possible taxation of a 
transaction but, rather, an effort to reach the approximate situation that would 
have existed for the public treasury had the tax entities proceeded in line with the 
law. Had the tax entities proceeded legally, the tax would have been paid to the 
public treasury only once. There is no reason for the public treasury to enrich 
itself with a tax that has been assessed twice. The proportionality principle is an 
integral component of European Union legal principles. The Regional Court 
applied it because that principle overrides the express text of a law. 
II. Applicable European Union and national legislation 
9 Article 205 of Council Directive 2006/112/EC of 28 November 2006 on the 
common system of value added tax (‘Directive 2006/112/EC’) stipulates that: 
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In the situations referred to in Articles 193 to 200 and Articles 202, 203 and 
204, Member States may provide that a person other than the person liable 
for payment of VAT is to be held jointly and severally liable for payment of 
VAT. 
10 In national legislation, the general regulation of tax liability is set out in 
Paragraphs 171 and 172 of zákon č. 280/2009 Sb., daňový řád (Law 280/2009, the 
Tax Code): 
Paragraph 171 
1. The guarantor shall also be obliged to pay the arrears if the law imposes 
liability on it and if the tax administrator informs it in a notice of the 
assessed tax for which it is liable and, at the same time, calls on it to pay 
the arrears within a specified period of time; a copy of the decision 
assessing the tax is attached to the notice. 
2. A notice to a guarantor may be issued if the arrears have not been paid by 
the tax subject, although the tax subject has been reminded to pay them 
without success, and the arrears have not been paid even when it is being 
enforced against the taxable person, unless it is clear that the 
enforcement would be demonstrably unsuccessful; a notice to the 
guarantor may also be issued after insolvency proceedings have been 
opened against the taxable person. 
11 The liability of a taxable person for VAT is regulated in Paragraph 109 of zákon č. 
235/2004 Sb., o dani z přidané hodnoty (Law 235/2004 on value-added tax: 
Paragraph 109 
Liability of the recipient in a taxable transaction  
(1) A taxable person who is the recipient in a taxable transaction with a 
place of performance in this country that is provided by another 
taxable person or who makes a payment in exchange for such a 
transaction (‘recipient in a taxable transaction’) shall be liable for any 
tax unpaid on that transaction provided it knew or should have and 
could have known at the time of the transaction that: 
(a) The tax stated in the tax document will not be intentionally paid; 
(b) The taxable person carrying out that taxable transaction or 
receiving a payment for the transaction (‘the supplier in a 
taxable transaction’) has deliberately placed itself or finds itself 
in a position when it is unable to pay the tax; or  
(c) There is tax evasion or the obtaining of a tax advantage involved. 
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(2) The recipient in a taxable transaction shall also be liable for unpaid 
tax on the transaction if the payment for the transaction 
(a) Manifestly deviates from the normal price without economic 
justification; 
(b) Was provided in part or in full by means of a cashless transfer 
to an account held by a payment services provider outside of the 
country; or  
(c) Was provided in part or in full by means of a cashless transfer to 
an account other than the account of the supplier in the taxable 
transaction that is published by the tax administrator in a 
manner permitting remote access. 
12 In the present case, the Financial Administration applied liability pursuant to 
Paragraph 109(2)(b) of the Law on value-added tax. The SAC interpreted that 
provision in its judgment of 15 February 2018, ref. no. 5 Afs 78/2017-33, KOVÁŘ 
plus, CZ:SAC:2018:5.Afs.78.2017.33. It emphasised the obligation to interpret the 
provision in a manner conform with European norms, that is, in line with the 
requirements set out by the Court of Justice in respect of the conditions for the 
application of joint and several liability under Article 205 of Directive 
2006/112/EC. A condition for liability pursuant to that provision therefore is that 
there must be other circumstances, in addition to the making of a payment to an 
account maintained by a payment services provider outside of the country, which 
will clearly indicate that the taxable person who made the payment to the account 
outside of the country knew, or could have known, that the purpose of the 
payment being directed outside of the country is to avoid paying tax. 
13 The defendant in its second set of decisions examined whether there were other 
circumstances from which it could be inferred that FAU knew, or could have 
known, that its supplier, VERAMI, would not pay the VAT specified in the 
invoices. 
14 The concept of liability applied in national tax law is based on the general private-
law foundations of the rule. Hence, the SAC has inferred in its case-law that 
liability is a security instrument and exists in addition to the principal obligation. 
It is of an ancillary nature and, hence, the existence of a liability is linked to the 
secured principal obligation and follows its outcome. The scope of the liability is 
derived from the principal obligation and, unless the law stipulates otherwise, it 
ceases to exist with the termination of the principal obligation. Another aspect of 
the liability is its subsidiary nature, due to the fact that it can be claimed from the 
guarantor only once the debtor fails to perform its principal obligation (or part 
thereof) that is secured by the liability (see, for example, judgment of the SAC in 
KOVÁŘ plus). If the guarantor has indeed paid the debtor’s principal obligation, 
on behalf of the debtor, the guarantor has a recourse claim against the debtor 
(subrogation). Hence, the guarantor has a right to claim compensation from the 
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debtor for payments made by the guarantor, on the debtor’s behalf, for the 
creditor, towards the principal obligation. This guarantor also has this private-law 
right in the event of statutory liability for unpaid tax (judgment of the Grand 
Chamber of the Supreme Court of the Czech Republic of 8 September 2010, file 
no. 31 Cdo 1693/2008, CZ:NS:2010:31.CDO.1693.2008.1, in relation to civil law 
applicable until 31 December 2013; for the legal regulation in effect from 
1 January 2014 see Paragraphs 1937 and 1938 of zákon č. 89/2012 Sb., občanský 
zákoník (Law 89/2012, the Civil Code). 
15 In view of the conditions in which liability may be applied in tax law (see 
Paragraph 171(3) of the Tax Code, referred to above), however, the guarantor’s 
recourse claim may be considered as difficult to enforce. The Financial 
Administration can call on the guarantor to pay the debt only if the administration 
has failed to enforce the debt from the debtor (namely, in enforcement 
proceedings). The only case where collection of the debt in enforcement 
proceedings is not required is if it would be demonstrably unsuccessful or if the 
debtor is insolvent. In the present case, VERAMI was insolvent at the time of the 
issuance of the notice to the guarantor, and its insolvency was being dealt with by 
means of insolvency. The yield in insolvency is generally very low in the Czech 
Republic. Hence, it cannot be assumed that, had the guarantor (FAU in this case) 
paid the arrears of VERAMI to the Financial Administration in this situation, it 
would have been successful in making its recourse claim against the company. 
Hence, it must be assumed that a guarantor generally cannot obtain from the 
principal debtor (its supplier) compensation for amounts paid by it to the Financial 
Administration as payment of the principal debtor’s tax arrears. 
III. Analysis of the question in the preliminary reference  
16 The SAC deems it useful to observe that two levels of the application of value-
added tax are intertwined in the question referred. The first is the denial of a tax 
deduction, and the second is the application of liability for the payment of tax on 
the performance of a taxable transaction by the supplier. 
Denial of the right to a tax deduction 
17 The first level is the determination of the tax obligation of FAU, which reflects the 
making of a claim to a tax deduction on supplies received in transactions with 
VERAMI. On the level of national tax law, the proceedings are proceedings for a 
finding based on the Tax Code. The outcome was an assessment of additional tax 
on FAU for each of the taxable periods. FAU was denied the right to a tax 
deduction under Article 168 of Directive 2006/112/EC because the supply 
received, which gave rise to the right to a deduction, was part of a chain of trading 
affected by tax evasion. That level is not the subject of the review in the present 
case. It must not, however, be disregarded, as it forms the context of the question 
referred. 
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18 Both FAU and its supplier, VERAMI, were assessed with an additional tax 
obligation: the obligation to pay tax on a taxable transaction was set for them 
(output tax) but they were denied the right to a deduction of the input tax. The 
reason behind that was the fact that the acquisition of the taxable supply by 
VERAMI, and the acquisition of the same taxable supply by FAU, were part of a 
single chain of trade which, in its previous links, was affected by a loss of tax due 
to evasion. The Financial Administration inferred that both VERAMI and FAU 
knew or could have and should have known that the taxable supply obtained by 
them was affected by tax evasion. They did not, however, take any preventive 
measures that would make it possible to avoid taking part in that evasion. 
19 In its judgment of 24 November 2022 in Finanzamt M, C-596/21, 
EU:C:2022:921, the Court of Justice stated that, not being aware of tax evasion is 
an implied material condition for the right to a deduction. A person who does not 
meet that condition must be denied the right to a deduction in its entirety. The 
principal object of the obligation of the Financial Administration and of the court 
to deny the right to a deduction is to impose an obligation of due care on taxable 
persons. The obligation of due care means the requirement that they make sure, in 
respect to every economic performance, that the supplies made by them will not 
participate in tax evasion. That objective could not be effectively achieved if the 
denial of the right to a deduction were proportionately restricted only to part of the 
amounts paid as due VAT that corresponds to the amount that is the subject of tax 
evasion. Otherwise, that would encourage taxable persons to adopt appropriate 
measures in order to limit the consequences of tax evasion, but not necessarily to 
take measures that enable them to make sure that they will not take part in or 
facilitate tax evasion through the transactions in which they become involved. The 
fact that a taxable person has obtained goods or services, even though it knew or 
should have known that, by doing so, it was taking part in a transaction that 
involves tax evasion committed on input, suffices to conclude that the taxable 
person took part in that evasion. That is sufficient grounds for denying that person 
its right to a deduction, without it being necessary to prove that there is a risk of a 
loss of tax revenue. 
20 It follows from the case-law of the Court of Justice that the principle of tax 
neutrality for the purpose of a deduction cannot be relied upon by a taxable person 
who has participated in tax evasion (order of 14 April 2021, Finanzamt 
Wilmersdorf, C-108/20, EU:C:2021:266). 
21 The SAC infers from that current case-law of the Court of Justice that the purpose 
of denying the right to a tax deduction on the grounds that a chain of trading was 
affected by tax evasion is not to compensate for tax that has not entered into the 
public budget, but to protect the VAT system from fraud. That measure is aimed 
primarily at the prevention of tax evasion, which implies that it is of a somewhat 
deterrent nature. Prevention would not be effective if the missing tax could be 
assessed on only one member of a fraudulent chain. Hence, it is necessary to 
proceed on the assumption that the right to a deduction does not arise for any 
entity that knowingly engaged in tax evasion. If the Financial Administration were 
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to restrict the denial of a deduction solely to the collection of the missing tax, it 
would be discriminatory both against the entity that is assessed with the additional 
tax (the entity will be liable for being involved in evasion without other members 
of the chain which could have been aware of the evasion being affected), and 
against honest entities that would thereby be placed at an undue disadvantage 
compared to dishonest entities. It follows from the above that the Financial 
Administration is entitled to deny a tax deduction to all the members of a 
fraudulent chain (see the SAC’s judgment of 19 January 2023, ref. no. 1 Afs 
101/2021-42, Trimet Prag, CZ:SAC:2023:1.Afs.101.2021.42; judgment of 
26 January 2023, ref. no. 1 Afs 164/2021-52, Z + M servis, 
CZ:SAC:2023:1.Afs.164.2021.52; judgment of 29 March 2023, ref. no. 2 Afs 
298/2021-69, LAKUM – AP, CZ:SAC:2023:2.Afs.298.2021.69; judgment of 
27 April 2023, ref. no. 7 Afs 160/2021-89, T R I O D O N, 
CZ:SAC:2023:7.Afs.160.2021.89; judgment of 25 October 2023, ref. no. 1 Afs 
1/2023-71, FEPO – europalety, CZ:SAC:2023:1.Afs.1.2023.71; or judgment of 
7 September 2021, ref. no. 6 Afs 158/2019-63, ANAFRA, 
CZ:SAC:2021:6.Afs.158.2019.63). 
22 In view of the above conclusions of the case-law of the Court of Justice and the 
related case-law of the SAC, it is evident that a permissible disruption of tax 
neutrality occurred in the present case, by denying the right to a tax deduction not 
only to FAU but also to its supplier, VERAMI. That occurred due to the 
involvement of the two companies in tax evasion. That level of comprehensive 
relationship has therefore been sufficiently addressed by the case-law of the Court 
of Justice and does not necessitate a request for a preliminary ruling. That would 
moreover not be possible since this level concerning the findings part of the tax 
procedure is not the subject of the judicial review in this case. 
Liability for tax not paid by the provider in a taxable transaction 
23 Article 205 of Directive 2006/112/EC gives Member States the option to 
introduce joint and several liability for the payment of tax, without setting 
conditions for that liability. To a certain extent, the Court of Justice has 
pronounced on them, first in relation to an article with similar content – 
Article 21(3) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the 
harmonization of the laws of the Member States relating to turnover taxes – 
Common system of value added tax: uniform basis of assessment (77/388/EEC). 
24 The judgment of 11 May 2006, Federation of Technological Industries and 
others, C-384/04, EU:C:2006:309 should be regarded as fundamental. In it, the 
Court of Justice emphasised that, in exercising the powers conferred on them by a 
European Union directive, Member States are obliged to respect general legal 
principles embodied in the European Union’s legal order, in particular the 
principle of legal certainty and the principle of proportionality. As for the 
principle of proportionality, it is legitimate that the measures adopted by the 
Member State pursuant to Article 21(3) of Council Directive 77/388/EEC strive to 
achieve the most effective protection of payments to the public treasury possible; 
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nevertheless, they must not exceed the framework of what is required for attaining 
that purpose. Article 21(3) of Council Directive 77/388/EEC makes it possible to 
consider a person concerned liable jointly and severally for the payment of tax, if, 
at the time of a transaction made for its benefit, it knew or should have known that 
the tax due for the transaction or for a previous or subsequent transaction would 
remain unpaid. In this regard, the state may proceed on the basis of a certain 
presumption which, however, must not be practically impossible or unduly 
onerous for the person concerned to refute, by presenting evidence to the contrary. 
The use of presumption cannot result in establishing a de facto system of liability 
without guilt that would go beyond what is necessary for the protection of 
payments to the public budget. The persons who take any and all measures that 
may be reasonably required of them to ensure that their transactions not be part of 
a chain of supplies involving a transaction soiled by tax evasion must be able to 
trust in the legality of the said transactions without risking that they will bear joint 
and several liability for paying a tax payable by another taxable person. 
25 Those conclusions were upheld by the Court of Justice in its judgment of 
21 December 2011, Vlaamse Oliemaatschappij NV, C-499/10, EU:C:2011:871. 
26 The Court interpreted Article 205 of Directive 2006/112/EC in its judgment of 
20 May 2021, ‘ALTI’ OOD, C-4/20, EU:C:2021:397, stating that the provision 
does not specify the persons whom Member States can designate as joint and 
several debtors, or the situations in which such designations can be made. Hence, 
it is at the discretion of the Member States to set the conditions and methods of 
exercising joint and several liability. In view of the principles of legal certainty 
and the principle of proportionality, interpreted as in the previously cited 
judgments, Member States are free to designate a joint and several debtor other 
than the person liable for the tax, in order to ensure the effective collection of the 
tax. That designation must be justified by the factual or legal relationship between 
the two joint and several debtors. Member States have the discretion to specify 
special circumstances in which the recipient in a taxable transaction must be 
considered jointly and severally liable for the payment of a tax owed by its 
contractual partner, even though it has paid the tax in the price of the transaction. 
Furthermore, it reiterated the above conclusions of the judgment in Federation of 
Technological Industries and Others, adding that in the case of abuse in the sphere 
of VAT, the Financial Administration must be able, in the interest of efficiency, to 
enforce outstanding tax and all its accessories from each of the contractual 
partners who took part in the abuse. 
27 Hence it follows from the case-law of the Court of Justice that the determination 
of the conditions for the application of joint and several liability for the payment 
of tax is at the discretion of the Member States; however, those conditions must 
respect the principle of legal certainty and the principle of proportionality. It is 
impossible to apply a system of objective liability that would not allow liability to 
be discharged in the event of the existence of good faith, based on the application 
of all the measures which may legitimately be required to be taken, to avoid the 
person concerned taking part in evasion. 
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28 The SAC understands that the Court of Justice is also due to deal with the 
interpretation of Article 205 of Directive 2006/112/EC in Case C-331/23, 
Dranken Van Eetvelde NV. It is not evident from the information that is publicly 
available about that case, in particular from the formulation of the questions 
referred, that the Court of Justice should express its opinion on an issue that is 
essential in the evaluation of the case being heard by the SAC. 
29 The Court of Justice has thus far not examined the question whether it is 
consistent with the principle of proportionality for a supplier to be held jointly and 
severally liable for unpaid tax while being denied the right to a deduction on the 
ground of participation in tax evasion in the same commercial transactions. 
Moreover, that being in a situation where the taxable person against which both 
measures are being applied simultaneously knew or at least could have and should 
have known that it has become involved in tax evasion by accepting the taxable 
supply, and that its supplier will not pay tax on the taxable supplies it accepted 
from it. Hence, that question cannot be deemed an acte éclairé or, given its 
ambiguity, as an acte clair. 
30 In that regard, the SAC states that the simultaneous application of the denial of the 
right to deduct tax and of liability for the payment of tax by the supplier is not 
expressly provided for in national law. That is the outcome of the administrative 
practice of the Financial Administration, the legality of which has not yet been 
examined by the SAC. In terms of a systematic interpretation of national law, it 
appears that the simultaneous application of those instruments is not ruled out. 
The denial of the right to deduct tax is an instrument in the determination of tax in 
the context of the findings phase of tax proceedings. Furthermore, in the present 
case, that concerns FAU’s own tax liability. On the other hand, liability for the 
supplier’s unpaid tax is an instrument of the phase of the payment of tax that 
follows the findings part of the tax procedure (see SAC judgment of 18 December 
2018, ref. no. 7 Afs 8/2018-56, ARMOSTAV MÍSTEK, 
CZ:SAC:2018:7.Afs.8.2018.56, and judgment of 24 January 2022, ref. no. 10 Afs 
57/2021-65, EKO Logistics, CZ:SAC:2022:10.Afs.57.2021.65). The liability 
requirement does not concern FAU’s own tax obligation but, rather, the output tax 
on taxable supply received, which was calculated by VERAMI (that is, FAU’s 
supplier) in an invoice and which VERAMI is obliged to pay to the public budget. 
Hence, although both liability and the denial of the right to a deduction concern 
the same business transaction (taxable supply), they pertain to the tax obligations 
of different taxable persons. The liability pertains to the tax obligation of 
VERAMI (output tax), while the denial of the right to a deduction pertains to 
FAU’s tax obligation (input tax). 
31 The only question which raises doubts as to the permissibility of the simultaneous 
application of both measures to FAU is the appropriateness of the application of 
liability in a situation where FAU has already been denied, by a final decision, the 
right to deduct tax on the same taxable supplies. In the context of Article 205 of 
Directive 2006/112/EC, the principle of proportionality is interpreted as meaning 
that measures whereby a Member State seeks to ensure the most effective 
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protection of payments to the public treasury must not go beyond what is 
necessary to achieve that purpose. To assess the present case, it is essential to 
answer the question whether the denial of FAU’s right to deduct tax, on the 
grounds that the taxable transaction is part of a chain of trades affected by tax 
evasion, constitutes a measure sufficient to ensure protection for payments to the 
public budget and an adequate tool for combatting tax evasion. If the denial of 
FAU’s right to a tax deduction did not suffice to protect those public interests and 
it was therefore necessary to use all means to collect the unpaid tax of VERAMI, 
in order to achieve the aforementioned legitimate objectives, there must be an 
assessment of whether the application of the rule of liability against FAU is 
compliant with the principle of proportionality (given the circumstances of the 
present case). 
32 The SAC does not consider that FAU may rely on the rule arising from the case-
law of the Court of Justice, according to which the risk caused by fraudulent 
conduct of a third party should be distributed between the supplier and the 
revenue administrator in line with the principle of proportionality (judgment of 
21 February 2008, Netto Supermarkt, C-271/06, EU:C:2008:105). FAU at least 
could have and should have known that it had become involved in tax evasion by 
accepting the taxable supply from VERAMI. 
33 Two facts that have already been mentioned above may be essential for the 
evaluation by the Court of Justice of the question referred; nevertheless, it is 
appropriate to state them again explicitly. The first fact is that the Financial 
Administration did indeed deny FAU’s right to a tax deduction on the supplies 
received from VERAMI, but that occurred only subsequently, after the tax audit 
during the assessment procedure. Due to this, FAU was assessed with additional 
tax which it failed to pay due to its insolvency. This means that FAU has failed to 
settle its liabilities to the public treasury that are directly linked to the denial of the 
tax deduction. This is pointed out by the defendant in its appeal in cassation. It 
must, however, also be added that the tax arrears of FAU can, in general, be 
enforced against the company; nevertheless, it must be added that in the present 
case, that is only pursuant to the rules governing insolvency proceedings. 
34 The second fact is that if FAU had paid the tax obligation of its supplier due to its 
guarantee liability, it is not very likely, in view of the national legal regulation of 
the subsidiarity of the liability for the tax arrears, that it would have subsequently 
actually been able to obtain compensation from its supplier (see above for more 
details). 
[…] [the question referred restated] 
[…] [national proceedings] 
[…]