EU Court Case T-356/25: A Landmark Ruling on VAT Representative Liability in Greece

In a landmark ruling with far-reaching implications for tax professionals operating across EU member states, the General Court of the European Union has drawn a clear boundary on when a fiscal representative can be held jointly and severally liable for a foreign principal's unpaid VAT. The case — T-356/25 — arose from a Greek preliminary reference and directly challenges the legality of Greece's current VAT enforcement framework.

Opening Hook: One Agent, €3.3 Million in Claims

A customs agent based in Greece had been appointed fiscal representative of an Italian company trading in cellulose — a relatively routine commercial arrangement under EU VAT law. Her role was narrowly defined: filing periodic VAT returns, processing customs formalities, and paying assessed amounts. She had no access to the Italian company's books, no knowledge of its transactions, and no involvement in its commercial operations.

When a tax audit revealed €3.344 million in unpaid VAT by the Italian company for fiscal years 2020–2022, Greece's AADE did not stop at the company itself. It applied precautionary measures — account freezes — to the fiscal representative as well, relying on the automatic joint liability mechanism of Article 55 of the Greek VAT Code. The customs agent challenged this in court. The Thessaloniki Administrative Court of First Instance referred four preliminary questions to the EU General Court.

Key Developments: What the Court Decided

In its July 8, 2026 judgment, the General Court addressed four critical questions with significant practical implications:

• Article 204 (VAT Directive): A fiscal representative may be designated as the liable person for VAT — even without involvement in the principal's transactions — provided the taxable person has actually made that designation. Whether this has occurred is a factual question for the national court.

• Article 205 and proportionality: Joint and several liability cannot apply to a representative who merely files VAT returns when the tax authority fails to examine: (a) whether the representative was involved in the principal's business, (b) whether they knew or should have known the tax would go unpaid, and (c) whether they acted in good faith and took all reasonable steps. Automatic, unconditional liability systems — like Article 55 of the Greek VAT Code — exceed what is necessary under EU law.

• VAT number irrelevant: Whether the transaction used the Italian or Greek VAT registration number of the principal makes no legal difference to the representative's liability.

• Roles cannot be combined: A person designated as the liable party under Article 204 cannot simultaneously be held jointly liable under Article 205 — the latter, by definition, applies to persons other than the primary liable party.

Market & Business Perspective

The ruling creates a direct clash with the approach taken by the Greek Dispute Resolution Directorate (DED) in its 2025 decision (1343/2025), which had rejected the same fiscal representative's challenge — dismissing as irrelevant her claims of non-involvement and lack of knowledge, and basing liability solely on the representative status. The EU General Court has now declared this approach incompatible with EU VAT law.

For professionals operating as fiscal representatives — accountants, customs agents, tax lawyers — this opens a significant legal avenue to challenge existing or pending assessments based on automatic liability provisions.

Why It Matters for Your Business

This ruling establishes that proportionality — one of the fundamental principles of EU administrative and fiscal law — is a concrete operative standard, not a rhetorical safeguard. Greek tax law cannot impose open-ended strict liability on agents who have no knowledge of or participation in the underlying tax evasion.

The practical consequences are immediate. Any professional currently serving as a fiscal representative for a foreign entity in Greece should review their exposure and contractual terms. Tax authorities are now legally required to assess subjective elements — knowledge, involvement, good faith — before imposing joint liability.

Key Takeaways

• Automatic, strict joint liability for fiscal representatives is incompatible with EU law when it ignores knowledge and good faith

• Article 55 of the Greek VAT Code, as applied, violates the proportionality principle under EU VAT Directive Articles 204–205

• Fiscal representatives who were assessed under automatic liability provisions may now have grounds to appeal or seek refunds

• All representation agreements should be reviewed to clearly define the scope of liability and document the representative's actual involvement

• Greek legislative amendments to align Article 55 with EU law are now expected in the medium term

Closing Insight

Case T-356/25 is more than a procedural win for a Greek customs agent. It signals that the EU's highest courts are actively constraining over-reaching national tax enforcement mechanisms, reinforcing the principle that liability must be earned — not assumed. For cross-border service providers, tax intermediaries, and their professional advisors, this ruling reshapes the risk landscape of fiscal representation in Europe.

ROQ Consulting provides specialized legal and tax advisory services for cross-border VAT compliance, fiscal representation agreements, and tax dispute resolution. Reach out to assess your current exposure in light of this ruling.

Source: Taxheaven.gr

Read the full article here: https://www.taxheaven.gr/news/74117/t35625-ta-arora-204-kai-205-ths-odhgias-fpa-kai-ta-oria-ths-allhleggyas-eyoynhs-toy-forologikoy-antiproswpoy

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