© 2025 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
S1. Export and dispatch of goods
GENERAL
- Exemptions for specific types of goods/supplies have priority over zero-rating of dispatch
"[32] However, contrary to Eurodental’s submissions, it does not follow that a transaction covered by Article 13 of the Sixth Directive, where it is intra-Community in nature, necessarily, and on that sole ground, falls within the scope of Articles 15 and 28c with the effect that, given the reference made by Article 17(3)(b) of the directive to those provisions, that transaction may give rise to the deduction of input VAT.
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[37] Therefore, notwithstanding the wording of the headings of the relevant provisions of the Sixth Directive, it is apparent from the examination of their content that the transactions exempted under Article 13 of the directive do not give rise to the right to deduct input VAT even where those transactions are of an intra-Community nature." (Eurodental C-240/05)
- Zero-rating to apply if substantive conditions met even if some formal conditions not met
"[20] It should also be noted that, according to the case-law of the Court, Article 138(1) of the VAT Directive requires Member States to exempt from VAT supplies of goods which satisfy the conditions listed in that article. In addition, according to the same case-law, formal requirements cannot undermine the vendor’s entitlement to exemption from VAT where the substantive conditions for an intra-Community supply are satisfied. Similarly, the principle of fiscal neutrality requires that an exemption from VAT be allowed if the substantive requirements are satisfied, even if the taxable person has failed to comply with some of the formal requirements (see, to that effect, judgment of 9 February 2017, Euro Tyre, C‑21/16, EU:C:2017:106, paragraphs 23, 32, 35 and 36). In that context, it should be stated that there are only two situations in which the failure to meet a formal requirement may result in the loss of entitlement to an exemption from VAT. In the first place, the principle of fiscal neutrality cannot be invoked for the purposes of an exemption from VAT by a taxable person who has intentionally participated in tax evasion which has jeopardised the operation of the common system of VAT. In the second place, non-compliance with a formal requirement may lead to the refusal of an exemption from VAT if that non-compliance would effectively prevent the production of conclusive evidence that the substantive requirements have been satisfied (judgment of 9 February 2017, Euro Tyre, C‑21/16, EU:C:2017:106, paragraphs 38, 39 and 42)." (Flo Veneer C-639/24)
"[34] Accordingly, when the substantive requirements have been satisfied, the principle of fiscal neutrality requires the VAT exemption to be granted even if certain formal requirements have been omitted by the taxable persons (judgment of 17 December 2020, BAKATI PLUS, C‑656/19, EU:C:2020:1045, paragraph 72 and the case-law cited).
[35] It follows from the foregoing that the classification of a transaction as a ‘supply of goods’ within the meaning of Article 146(1)(a) and (b) of the VAT Directive cannot be refused on the ground that the dispatch or transport outside the European Union was carried out without the supplier’s knowledge and was established by the tax authorities and not by the supplier itself." (W C-602/24)
"[28] When those substantive requirements have been satisfied, the principle of fiscal neutrality requires the VAT exemption to be granted even if certain formal requirements have been omitted by the taxable persons (judgment of 8 November 2018, Cartrans Spedition, C‑495/17, EU:C:2018:887, paragraph 39)."(Unitel C-653/18)
- Intra-community dispatch not interpreted as depending on intention of vendor as to transpor: objective fact of physical movement
"[39] Contrary to Teleos and Others’ argument that the supplier’s and purchaser’s intention to effect an intra-Community transaction is sufficient for its classification as such, it is clear from the Court’s case-law that requiring the tax authorities to carry out inquiries to determine the intention of the taxable person would be contrary to the objectives of the common system of VAT of ensuring legal certainty and facilitating the measures necessary for the application of VAT by having regard, save in exceptional cases, to the objective character of the transaction concerned (see Case C‑4/94 BLP Group [1995] ECR I-983, paragraph 24; Optigen and Others , paragraph 45; and Kittel and Recolta Recycling , paragraph 42).
[40] Consequently, it is necessary that the classification of intra-Community supplies and acquisitions be made on the basis of objective matters, such as the physical movement of the goods concerned between Member States." (Teleos C-409/04)
- Must physically have left Member State of dispatch
"[42] In the light of the foregoing considerations, the reply to the first and second questions referred must be that the first subparagraph of Article 28a(3) and the first subparagraph of Article 28c(A)(a) of the Sixth Directive are, having regard to the term ‘dispatched’ in those two provisions, to be interpreted as meaning that the int ra-Community acquisition of goods is effected and the exemption of the intra-Community supply of goods becomes applicable only when the right to dispose of the goods as owner has been transferred to the purchaser and the supplier establishes that those goods have been dispatched or transported to another Member State and that, as a result of that dispatch or that transport, they have physically left the territory of the Member State of supply." (Teleos C-409/04)
Proof of transport
- For supplier to furnish proof
"[46] Moreover, it is apparent from the case-law of the Court that, in order to be eligible for the exemption under the first subparagraph of Article 28c(A)(a) of the Sixth Directive, it is for the supplier of the goods to furnish the proof that the conditions laid down for the application of that provision, including those imposed by the Member States for the purpose of ensuring the correct and straightforward application of the exemptions and for preventing any evasion, avoidance or abuse, are fulfilled (see, to that effect, Twoh International, paragraph 26)." (R C-285/09)
- No particular evidence specified
"[17] Similarly, Article 138(1) of the VAT Directive does not make the grant of the exemptions provided for by that article conditional upon the vendor being in possession of specific evidence." (Flo Veneer C-639/24)
- Take proper account of all information in possession to substantiate likelihood
"[21] It is also apparent from the case-law that, with a view to the exemption from VAT, the tax authorities must take proper account of all the information in their possession for the purposes of examining whether those documents may, where necessary, substantiate the likelihood of the actual intra-Community supply (judgment of 29 February 2024, B2 Energy, C‑676/22, EU:C:2024:186, paragraph 36)." (Flo Veneer C-639/24)
- Purchaser responsible for transport: take account of fact that evidence vendor can produce depends on purchaer
"[42] Furthermore, it should be pointed out that, where the purchaser has the right to dispose of the goods as owner in the Member State of supply and where that person assumes the obligation of transportation of those goods to the destination Member State, account must be taken of the fact that the evidence that the vendor might submit to the tax authorities depends essentially on information that it receives for those purposes from the purchaser (see, to that effect, Euro Tyre Holding, paragraph 37).
[43] The Court accordingly found that, once the vendor has fulfilled his obligations relating to evidence of an intra-Community supply, where the contractual obligation to dispatch or to transport the goods out of the Member State of supply has not been satisfied by the purchaser, it is the latter which must be held liable for the VAT in that Member State (see, to that effect, Teleos and Others, paragraphs 66 and 67, and Euro Tyre Holding, paragraph 38).
[44] It is apparent from the order for reference that, in the case before the referring court, Mecsek-Gabona claims to be entitled to exemption from VAT on the basis of (i) the VAT identification number assigned to the purchaser by the Italian tax authority, (ii) the fact that the goods sold had been picked up by foreign-registered vehicles and (iii) the CMRs returned by the purchaser from its address, indicating that the goods had been transported to Italy." (Mecsek-Gabona C-273/11)
- Fact that proof of export obtained by tax authority irrelevant
"[29] In the present case, it is common ground that the supply of the apples at issue in the main proceedings outside the territory of the European Union was established. The fact that the proof of that supply was obtained by the Polish tax authorities and not by the supplier is not relevant for the purposes of classifying the transaction at issue in the main proceedings as an export transaction, for the purposes of Article 146(1)(a) and (b) of the VAT Directive.
[30] In such circumstances, the second criterion referred to in paragraph 20 of the present judgment must be regarded as having been satisfied." (W C-602/24)
- Zero-rating cannot depend on export declaration to the exclusion of other evidence
"[49] However, it does not follow that the granting of such an exemption can be subject to the mandatory condition that the relevant transporter or intermediary must produce an export declaration for the purposes of establishing that the exports in fact took place, thereby excluding any other evidence capable of shoring up the conviction thus required by the competent tax authorities to make their conclusion.
[50] Imposing such a probative procedure, to the exclusion of any other, would amount to making the right to an exemption subject to compliance with formal obligations, within the meaning of the case-law referred to in paragraphs 38 and 39 of the present judgment, without examining whether the substantive requirements laid down by EU law have in fact been satisfied or not. The mere fact that a transporter or an intermediary taking part in a transport transaction is unable to produce an export declaration does not mean that such exportation has not in fact taken place." (Cartrans Spedition C-495/17)
- TIR carnet is evidence of export
"[63] It follows from the foregoing that a TIR carnet duly certified, in particular by the customs authorities of the third country of destination, constitutes an official document which, in principle, shows that the goods in question, by crossing the European Union’s external borders, have physically moved from the European Union to that third country and reached the latter.
[64] Such a crossing of borders and arrival of the goods in the third country of destination demonstrated by the TIR carnet constitute one of the elements of an export transaction which distinguishes it from a transaction which occurs within the European Union (see, by analogy, judgment of 27 September 2007, Teleos and Others, C‑409/04, EU:C:2007:548, paragraph 37).
[65] It follows that, when such a supply of transport services is made under cover of a TIR carnet, the latter, in the absence of precise grounds capable of casting doubt on the authenticity or reliability of that carnet and its contents, is particularly relevant in the specific context of the recognition of the right to the exemption in respect of that supply of transport services.
[66] The tax authorities must therefore take proper account of such a document, just as, moreover, and has been noted in paragraph 52 of the present judgment, they must take account of all of the information available to them." (Cartrans Spedition C-495/17)
- Tax return by purchaser is not conclusive proof that goods moved
"[71] In the context of the transitional arrangements for intra-Community supplies and acquisitions, it is necessary, in order to ensure the proper collection of VAT, that the competent tax authorities check, independently of each other, whether the conditions for intra-Community acquisition and for the exemption of the corresponding supply are satisfied. Therefore, even if presentation by the purchaser of a tax return relating to an intra-Community acquisition may be evidence of the actual transfer of the goods out of the Member State of supply, such a return does not however constitute conclusive evidence for the purpose of proof of an exempt intra-Community supply of goods." (Teleos C-409/04)
Subsequently established that goods did not leave Member State
- Innocent party entitled to rely on falsified proof of export to claim zero-rating
"[27] It follows that a supplier must be able to rely on the lawfulness of the transaction that he carries out without risking the loss of his right to exemption from VAT, if, as in the case in the main proceedings, he is in no position to recognise – even by exercising due commercial care – that the conditions for the exemption were in fact not met, because the export proofs provided by the purchaser had been forged." (Netto Supermarket C-271/06)
- Contrary to require supplier to account for VAT where tax authority initially accepted documents
"[50] Accordingly, it would be contrary to the principle of legal certainty if a Member State which has laid down the conditions for the application of the exemption of intra-Community supplies by prescribing, among other things, a list of the documents to be presented to the competent authorities, and which has accepted, initially, the documents presented by the supplier as evidence establishing entitlement to the exemption, could subsequently require that supplier to account for the VAT on that supply, where it transpires that, because of the purchaser’s fraud, of which the supplier had and could have had no knowledge, the goods concerned did not actually leave the territory of the Member State of supply.
[51] To oblige taxable persons to provide conclusive proof that the goods have physically left the Member State of supply does not ensure the correct and straightforward application of the exemptions. On the contrary, that obligation places them in an uncertain situation as regards the possibility of applying the exemption to their intra-Community supplies or as regards the need to include VAT in the sale price." (Teleos C-409/04)
- Collect tax from the customer who comply with contractual obligations re transport of goods
"[67] By contrast, as the Commission observes, once the supplier has fulfilled his obligations relating to evidence of an intra-Community supply, where the contractual obligation to dispatch or transport the goods out of the Member State of supply has not been satisfied by the purchaser, it is the latter who should be held liable for the VAT in that Member State." (Teleos C-409/04)
Connection between supply and transport
- Requires temporal and material link between supply of goods and transport
"[22]...(8) In order for a supply to involve the dispatch/transport of the goods there must be a temporal and material link established between the supply of goods in question and the transport of those goods as well as continuity in the course of the transaction (X v Skattenverket C-84/09 (X) paragraph 33).
(9) Where the dispatch or transport of the goods is effected by or on behalf of an intermediate supplier in a chain of transactions (i.e. the purchaser under the first transaction and supplier under the second), which supply represents the supply involving the dispatch/transportation of goods will depend on an overall assessment of all the specific circumstances (Euro Tyres paragraph 27).
(10) Where A supplies to B with B intending to collect the goods and move them it is reasonable for A's supply to B to be considered the supply eligible for exemption and made in the member state of departure (subject to evidencing the removal of the goods). Where however, B informs A that prior to departure the goods will be sold by B to C the dispatch/transport of the goods will only attach to the supply from B to C as A was not party to the supply effecting the dispatch/transport (Euro Tyre paragraphs 33 – 37).
(11) The question who holds the right to dispose of the goods whilst they are transported is strictly irrelevant; however, the circumstance that the transport is effected by the owner of the goods or on his behalf might play a role in the question of to which in a series of transactions the movement is ascribed (Euro Tyres paragraph 40).
(12) The circumstance that the goods are not transported to the address of the first person acquiring the goods does not exclude the possibility that the transport was undertaken in the context of the first supply. The address at which the transport finishes is thereby irrelevant (Euro Tyres paragraph 42).
(13) The purpose of the dispatch/transport must be materially linked, as a condition of the contract to the supply of those goods and not for some other purpose (i.e. further processing of the goods) (Fonderie 2A v Ministre de l'Economie et des Finances C-446/13 paragraph 28 and 30)." (Procurement International Limited v. HMRC [2024] UKFTT 949 (TC), Judge Brown KC)
- Transport must be ascribed to that supply
"[35] That said, the fact that the goods were received by entities other than those mentioned in the tax documents could indicate that they were the subject of a commercial transaction, the time of which may be decisive for the application of the exemption. The classification of the supply as an intra-Community supply, made by the supplier applying the exemption and specified in the tax documents, depends on whether the transport can actually be ascribed to that supply (see, to that effect, judgment of 27 September 2012, VSTR, C‑587/10, EU:C:2012:592, paragraph 31)." (B2 Energy C‑676/22)
- Not dependent on when ownership passes, relevant that T pays for and arranges transport
"[41] By reference to the principles derived from the CJEU case law identified at paragraph 22 above, we determine that the dispatch/transport of the goods is properly to be ascribed to the supply made by the Appellant. In particular we note:
(1) Although there are multiple supplies starting with that by the Appellant to the RPO before the goods enter into final consumption, the movement of the goods can only be ascribed to one of the supplies;
(2) That to which it is ascribed requires consideration of all of the facts and circumstances and is not dependant on when title or even economic ownership passes though that may be a relevant factor;
(3) The relevant temporal and material link between the transportation and delivery of the goods is to the Appellant's supply rather than the RPO's supply despite that the goods are delivered to the RR;
(4) It is the Appellant that arranges, contracts for and pays for the delivery services from UPS.
[42] We do not consider that the removal can be ascribed to the supply by the RPO to its customer as, save for providing the address of the RR, the RPO is not involved and does not control the movement. We infer that provided that delivery is made, the RPO has little interest in how, or through whom, the Appellant ensures that delivery is made." (Procurement International Limited v. HMRC [2024] UKFTT 949 (TC), Judge Brown KC)
- Customer did not take possession of goods whilst in T's warehouse
"[39] We reject as entirely fanciful HMRC's submission that the RPO takes possession of the goods whilst the goods are within the Appellant's warehouse once they are picked (meeting the description in paragraph 1(2) Schedule 4 VATA). At the point at which the goods are picked, they are simply allocated to an order. The title and risk in them remains with the Appellant and it is the Appellant's agent which takes physical possession of them for the purposes of delivering them to the RR. There is no sense in which the RPO takes possession of the goods. Contractually, and in accordance with the INCOTERMS, the RPO takes possession on delivery to the RR and not before.
[40] Applying the approach identified in Middle Temple as set out in paragraph 24 above to the facts we have found that the supply is a single composite supply of delivered goods to the RPO (reflecting the conclusion in ASOS)." (Procurement International Limited v. HMRC [2024] UKFTT 949 (TC), Judge Brown KC)
ZERO-RATING OF EXPORT
- Where there are two successive supplies but a single intra-EU movement, only one supply is zero-rated
"[40] Secondly, if the relevant provisions of the Sixth Directive are interpreted as meaning that the single intra-Community movement of goods is ascribed to only one of the two successive supplies, the purpose of the transitional arrangements under Title XVIa of that directive, namely to transfer the tax revenue to the Member State in which final consumption of the goods supplied takes place, can be easily attained. That transfer in fact occurs by means of the single transaction giving rise to an intra-Community movement of goods under the first subparagraph of Article 28c(A)(a) (exemption by the Member State of departure of the intra-Community dispatch or transport) in conjunction with Article 17(3)(b), as amended by Article 28f(1) (deduction or reimbursement by the Member State of departure of the VAT due or paid by way of input tax in that Member State), and the first subparagraph of Article 28a(1)(a) (taxation by the Member State of arrival of the intra-Community acquisition) of the Sixth Directive. That mechanism makes it possible to delimit clearly the authority to tax of the Member States concerned." (EMAG C-245/04)
"[22]...(3) In the context of intra-community supplies, where there are two successive supplies of the same goods, but the goods are subject only to a single intra-Community movement, the exemption and associated acquisition obligation can be ascribed only to one of the two successive supplies (EMAG paragraph 45)." (Procurement International Limited v. HMRC [2024] UKFTT 949 (TC), Judge Brown KC)
- Purpose: to ensure that goods are taxed at place of destination
"[19] The exemption of supplies of goods dispatched or transported outside the European Union is intended to ensure that the supplies of goods concerned are taxed at the place of destination of those goods, namely the place where the exported products will be consumed (see, to that effect, judgment of 17 October 2019, Unitel, C‑653/18, EU:C:2019:876, paragraph 20 and the case-law cited)." (W C-602/24)
- Zero-rating applies where right to dispose of goods transferred + goods have physically left territory
"[20] As the Court has already observed on several occasions, it follows from the provisions referred to in paragraph 18 above, and particularly from the word ‘dispatched’ in Article 146(1)(a) and (b) of the VAT Directive, that the export of goods is effected and the exemption of the supply of goods for export becomes applicable when the right to dispose of the goods as owner has been transferred to the person acquiring the goods, the supplier establishes that those goods have been dispatched or transported outside the European Union, and, as a result of that dispatch or that transport, the goods have physically left the territory of the European Union (see, to that effect, judgments of 17 October 2019, Unitel, C‑653/18, EU:C:2019:876, paragraph 21, and of 17 December 2020, BAKATI PLUS, C‑656/19, EU:C:2020:1045, paragraph 56)." (W C-602/24)
- Right to dispose of goods
"[22]...(6) The concept of a right to dispose as owner does not require there to be a transfer of formal legal ownership (certainly in a domestic law transfer of title sense) but the transfer or disposal of economic ownership which will usually entail at the very least the placing of the property at the disposal of the other party, as determined by reference to all the facts and circumstances by the national court (Staatssecretaris van Financien v Shipping and Forwarding Enterprise Safe BV Case C-320/88 (SAFE) paragraph 7, 8, 12 and 13)." (Procurement International Limited v. HMRC [2024] UKFTT 949 (TC), Judge Brown KC)
See further C2. Supply of goods
Goods leave the territory
- Where goods leave territory, there is no consumption in that territory
"[32] It should be noted that, since it is also common ground that there was no consumption of those apples in the territory of the European Union, it cannot be held that the supplier made a supply in the national territory." (W C-602/24)
- No requirement to identify the person acquiring the goods
"[24] The fact that exported goods are acquired outside the European Union by an entity which is not that mentioned on the invoice and which is not identified does not preclude those objective criteria from being met.
[25] Consequently, the characterisation of a transaction as a supply of goods within the meaning of Articles 146(1)(a) and (b) of the VAT Directive cannot be held subject to the condition that the person acquiring the goods must be identified.
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[30] First, a breach of a formal requirement may lead to the refusal of an exemption from VAT if the effect of the breach is to prevent the production of conclusive evidence that the substantive requirements have been satisfied (judgments of 8 November 2018, Cartrans Spedition, C‑495/17, EU:C:2018:887, paragraph 42, and of 28 March 2019, Vinš, C‑275/18, EU:C:2019:265, paragraph 35).
[31] Therefore, if the failure to identify the person actually acquiring the goods prevents, in a given case, it from being proved that the transaction at issue constitutes a supply of goods within the meaning of Article 146(1)(a) and (b) of the VAT Directive, that fact may lead to refusal of the exemption on exportation provided for in that article. On the other hand, requiring in all cases that the person who acquires the goods in the non-Member State must be identified, without seeking to ascertain whether the substantive conditions for that exemption, in particular the exit of the goods concerned from the customs territory of the European Union, have been met, is not in accordance with either the principle of proportionality or the principle of fiscal neutrality." (Unitel C-653/18)
- Supplier entitled to zero-rating where customer transports goods to different destination outside the territory
"[25] The Polish tax authorities deduce therefrom that the intra-Community supply subject to a VAT rate of 0%, initially envisaged, had not in fact been made. Accordingly, those authorities took the view that the supplier had not duly checked where the goods, which it had sold, would be delivered and that it had merely formally confirmed their delivery in Lithuania on the basis of the signature of the driver who carried out the transport of the goods, together with the transport company’s stamp.
[26] However, it must be held that such circumstances are not relevant for the purposes of classifying the transaction at issue in the main proceedings as an export transaction within the meaning of Article 146(1)(a) and (b) of the VAT Directive." (W C-602/24)
INTRA-EU DISPATCH
General
- Abolition of tax on intra-community movements
"[21] At the outset, it is appropriate to note that the questions referred by the national court arise in the context of the transitional arrangements for VAT applicable to intra-Community trade established, for the purpose of the abolition of internal frontiers on 1 January 1993, by Directive 91/680. Since that date, the imposition of tax on imports and the remission of tax on exports in trade between Member States were definitively abolished (second and third recitals in the preamble to that directive)." (Teleos C-409/04)
- Intra-community supply and acquisition: same transaction where fiscal competence is shared
"[46] As regards the rules governing the former, any intra-Community supply of goods, for the purposes of Article 138 of the VAT Directive, has as its corollary an intra-Community acquisition of those goods for the purposes of Article 2(1)(b) of that directive. The intra-Community supply and the intra-Community acquisition, which forms a second chargeable event, are one and the same economic transaction, in respect of which fiscal competence is shared between the Member State where dispatch of goods began and the Member State of arrival of those goods, which are responsible, respectively, for the exercise of the powers conferred on them (see, to that effect, judgment of 27 September 2007, Teleos and Others, C‑409/04, EU:C:2007:548, paragraphs 22 to 24).
[47] Thus, an intra-Community supply of goods is exempted in the Member State where dispatch of those goods began, without prejudice to the right to deduction or refund of input VAT paid in that Member State, whereas the intra-Community acquisition is subject to VAT in the Member State of arrival (see, to that effect, judgment of 7 December 2010, R., C‑285/09, EU:C:2010:742, paragraph 38 and the case-law cited)." (Climate Corporation Emissions Trading C-641/21)
- Purpose of rules is to move taxation to place of final consumption
"[37] Intra-Community supplies of goods are exempt by virtue of the first subparagraph of Article 28c(A)(a) of the Sixth Directive, which forms part of the transitional arrangements for the taxation of trade between Member States as laid down in Title XVIa of that directive, the purpose of which is to transfer the tax revenue to the Member State in which final consumption of the goods supplied takes place (see Case C‑409/04 Teleos and Others [2007] ECR I‑7797, paragraph 36; Case C‑146/05 Collée [2007] ECR I‑7861, paragraph 22; Case C‑184/05 Twoh International [2007] ECR I‑7897, paragraph 22; and Joined Cases C‑536/08 and C‑539/08 X and fiscale eenheid Facet-Facet Trading [2010] ECR I‑0000, paragraph 30)." (R C-285/09)
"[22] The Community legislature, after stating that conditions could not yet be brought about that would permit the principle of the taxation in the Member State of origin of goods supplied to be implemented without prejudicing the principle that tax revenue from the imposition of tax at the final consumption stage should accrue to the benefit of the Member State in which the final consumption takes place, introduced, under Title XVIa of the Sixth Directive, transitional arrangements for the taxation of trade between Member States, based on a new chargeable event, namely the intra-Community acquisition of goods (7th to 10th recitals in the preamble to Directive 91/680).
[23] In that regard, the intra-Community supply of goods and their intra-Community acquisition are, in fact, one and the same financial transaction, even though the latter creates different rights and obligations both for the parties to the transaction and for the tax authorities of the Member States concerned." (Teleos C-409/04)
Substantive conditions
- Taxing the acquisition has the corollary of exempting the dispatch to avoid double taxation
"[24] Thus, any intra-Community acquisition that is taxed in the Member State where the dispatch or intra-Community transport of goods ends under the first subparagraph of Article 28a(1)(a) of the Sixth Directive has, as a corollary, an exempted supply in the Member State in which that dispatch or transport began under the first subparagraph of Article 28c(A)(a) of that directive (Case C‑245/04 EMAG Handel Eder [2006] ECR I‑3227, paragraph 29).
[25] It follows that the exemption of an intra-Community supply corresponding to an intra-Community acquisition enables double taxation and, therefore, infringement of the principle of fiscal neutrality inherent in the common system of VAT, to be avoided.
- (1) Capacity of recipient; (2) transfer of right to dispose of goods; (3) physical movement of goods
"[20] Apart from those conditions, relating specifically to the capacity of the taxable person, to the transfer of the right to dispose of goods as owner and to the physical movement of the goods from one Member State to another, no other condition can be placed on the classification of a transaction as an intra-Community supply of goods, it being specified that the concept of intra-Community supply is objective in nature and applies without regard to the purpose or results of the transactions concerned (judgment of 27 September 2012, VSTR, C‑587/10, EU:C:2012:592, paragraph 30)." (B2 Energy C‑676/22)
Capacity of recipient
- VAT number on invoice is not substantive condition
"[59] However, neither the wording of Article 138(1) of Directive 2006/112 nor the case-law cited in paragraph 31 above mentions – as one of the substantive conditions, listed exhaustively, for an intra-Community supply – the obligation to have a VAT identification number.
[60] Admittedly, a VAT identification number provides proof of the tax status of the taxable person for the purposes of the application of VAT and facilitates the tax audit of intra-Community transactions. However, it constitutes a formal requirement which cannot undermine the right of exemption from VAT where the substantive conditions for an intra-Community supply are satisfied (see, by analogy, in relation to the right of deduction, Case C-385/09 Nidera Handelscompagnie [2010] ECR I-10385, paragraph 50, and Case C-438/09 Dankowski [2010] ECR I-14009, paragraphs 33 and 47)." (Mecsek-Gabona C-273/11)
- Retroactive removal of registration number not a ground for refusing zero-rating
"[64] As the European Commission rightly observes, it is contrary to the principle of proportionality that the vendor be held liable for the VAT solely on the ground that the purchaser’s VAT identification number was removed from the register with retroactive effect." (Mecsek-Gabona C-273/11)
- Facts may clearly show unidentified recipient was taxable person
"[34] It is also apparent from the wording of the order for reference and from the wording of the question referred that that question is based on the premiss that the tax authorities had the information necessary to verify, in the light of the facts, that the actual recipients had the status of taxable persons. More specifically, the referring court points out that the transport of rapeseed oil from the Czech Republic to Poland and its unloading at premises of the recipients, who are not identified by the applicant in the main proceedings in its tax returns, were not disputed by the tax authorities. Moreover, the supply at issue in the main proceedings concerns goods which, by their nature, appear to be intended for use in the course of an economic activity.
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[37] Furthermore, in the light of the principle of fiscal neutrality, a taxable person cannot be required, in order to be able to exercise its right to exemption from VAT, to prove, in every case, where the recipient of the goods concerned has not been identified, that that recipient has the status of a taxable person in so far as it clearly follows from the factual circumstances that that recipient necessarily had that status (see, by analogy, judgment of 9 December 2021, Kemwater ProChemie, C‑154/20, EU:C:2021:989, paragraph 40)." (B2 Energy C‑676/22)
- Acquisition must not be excluded from charge by Art 3
"[19] In addition, as is apparent from Article 139(1), second subparagraph, of the VAT Directive, exemption from that tax is subject to the condition that the supply cannot be made to a taxable person, or a non-taxable legal person, whose intra-Community acquisitions of goods are not subject to VAT pursuant to Article 3(1) of that directive (judgment of 9 October 2014, Traum, C‑492/13, EU:C:2014:2267, paragraph 25)." (B2 Energy C‑676/22)
- Fraudulent exclusion of real customer justifying refusal of exemption
"[50] The refusal of exemption in the case of non-compliance with an obligation provided for by national law – in this instance, the obligation to identify the person acquiring the goods and receiving the intra-Community supply – has a deterrent effect which is intended to ensure compliance with that obligation and to prevent any tax evasion or avoidance (see, by analogy, with regard to the withholding of a portion of the VAT which may be deducted, Profaktor Kulesza, Frankowski, Jóźwiak, Orłowski, paragraph 28).
[51] It follows from this that, in circumstances such as those at issue in the main proceedings, the Member State of departure of the intra-Community supply may refuse to apply the exemption pursuant to its powers under the first part of the sentence in Article 28c(A) of the Sixth Directive and for the purpose of ensuring the correct and straightforward application of the exemptions and of preventing any evasion, avoidance or abuse." (R C-285/09)
- Right to dispose of goods must be transferred
"[22]...(4) An intra-Community supply of goods and associated liability to account for VAT on those goods as an acquisition becomes applicable only where the right to dispose of the goods as owner has transferred to the purchaser and the supplier establishes that those goods have been dispatched or transported to another member state such that they have physically left the territory of the member state of supply (Regina (Teleos plc and others) v Customs and Excise Commissioners C-409/04 paragraph 42).
(5) The same principle as is identified in (4) above applies to exports to third countries exempted under Article 146 (BDV Hungary Trading Kft v Nemzeti Adó- e´s Vámhivatal Köze´p-magyarországi Regionális Adó Fo?igazgatósága C-563/12 paragraph 24)." (Procurement International Limited v. HMRC [2024] UKFTT 949 (TC), Judge Brown KC)
See further C2. Supply of goods
Right to dispose of goods
- Contract providing for transfer at time of loading of goods
"[33] In that regard, it is apparent from the order for reference that it is not disputed that the condition relating to transfer of the right to dispose of goods as owner is satisfied in the case before the referring court, given that, under the contract between the parties, the transfer took place at the time when the goods were loaded on to the means of transportation provided by the purchaser and the Hungarian tax authority did not dispute the fact that the goods had been loaded." (Mecsek-Gabona C-273/11)
Presumptions of transport
- Presumption that goods have been transported
"(1) For the purpose of applying the exemptions laid down in Article 138 of [the VAT Directive], it shall be presumed that goods have been dispatched or transported from a Member State to a destination outside its territory but within the [European] Community in either of the following cases:
(a) the vendor indicates that the goods have been dispatched or transported by him or by a third party on his behalf, and either the vendor is in possession of at least two items of non-contradictory evidence referred to in point (a) of paragraph 3 which were issued by two different parties that are independent of each other, of the vendor and of the acquirer, or the vendor is in possession of any single item referred to in point (a) of paragraph 3 together with any single item of non-contradictory evidence referred to in point (b) of paragraph 3 confirming the dispatch or transport which were issued by two different parties that are independent of each other, of the vendor and of the acquirer;
(b) the vendor is in possession of the following:
(i) a written statement from the acquirer, stating that the goods have been dispatched or transported by the acquirer, or by a third party on behalf of the acquirer, and identifying the Member State of destination of the goods; that written statement shall state: the date of issue; the name and address of the acquirer; the quantity and nature of the goods; the date and place of the arrival of the goods; in the case of the supply of means of transport, the identification number of the means of transport; and the identification of the individual accepting the goods on behalf of the acquirer; and
(ii) at least two items of non-contradictory evidence referred to in point (a) of paragraph 3 that were issued by two different parties that are independent of each other, of the vendor and of the acquirer, or any single item referred to in point (a) of paragraph 3 together with any single item of non-contradictory evidence referred to in point (b) of paragraph 3 confirming the dispatch or transport which were issued by two different parties that are independent of each other, of the vendor and of the acquirer.
The acquirer shall furnish the vendor with the written statement referred to in point (b)(i) by the tenth day of the month following the supply.
(2) A tax authority may rebut a presumption that has been made under paragraph 1.
(3) For the purposes of paragraph 1, the following shall be accepted as evidence of dispatch or transport:
(a) documents relating to the dispatch or transport of the goods, such as a signed CMR document or note, a bill of lading, an airfreight invoice or an invoice from the carrier of the goods;
(b) the following documents:
(i) an insurance policy with regard to the dispatch or transport of the goods, or bank documents proving payment for the dispatch or transport of the goods;
(ii) official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the Member State of destination;
(iii) a receipt issued by a warehouse keeper in the Member State of destination, confirming the storage of the goods in that Member State." (IR 282/11, Article 45a)
- In other cases, tax authority required to assess evidence
"[16]...Consequently, where the conditions for the application of the presumption are not satisfied, the tax authorities are required to assess any evidence provided by the vendor of the goods for the purpose of determining whether the vendor has succeeded in demonstrating that those goods were the subject of an intra-Community supply.
...
[19] It should be noted that the taking into account, by the tax authorities, of evidence other than that provided for in Article 45a of Implementing Regulation No 282/2011 does not preclude the objectives of Implementing Regulation 2018/1912 which consist in promoting intra-Community trade and preventing fraud. By contrast, if the vendors of the goods could not rely on all evidence, those vendors not in possession of the evidence referred to in Article 45a of Implementing Regulation No 282/2011 would be deprived of the exemption at issue on account of the failure to comply with a formal requirement, even though the intra-Community supply of goods actually took place. Accordingly, the objective of promoting intra-Community trade would be undermined." (Flo Veneer C-639/24)