VAT on intra-community deliveries of goods

Czech Republic: In the opinion of the Advocate General, the VAT registration number ought to be considered a formal requirement for intra-community deliveries.

According to the ECJ Advocate General, the valid VAT Reg. No. of a buyer of goods from another EU member state must not be considered a mandatory prerequisite for the tax exemption of intra-community deliveries. While this opinion of the advocate general is not binding for the court of justice, it is nonetheless an important basis for, and has impact on, the decision-making process of the court. We will have to wait and see whether the above-described interpretation enters the decision-making practice of the ECJ.

Pursuant to Council Directive 2006/112/EC, the sale of goods between commercial entities from one EU member state to the other is exempt from VAT. In this respect, it is generally accepted that the tax exemption is conditional upon the buyer providing a valid VAT Reg. No. to the seller, who may verify the same by looking it up in the VIES database. Further, the seller must render proof that the goods have left the territory of one member state and have been forwarded to the other member state within the context of an external transit procedure (waybill/loading list).

The Advocate General contested that the requirement of a valid VAT Reg. No. on the part of the buyer had substantive character, in the specific German case of Josef Plöckl vs. the finance office in Munich. In the case at hand, a German seller had sold a car to a Spanish company and substantiated the exemption of this transaction from German VAT by producing a loading list (by way of proof of the forwarding of the car to Spain), and the invoice made out to the Spanish customer. However, the Spanish buyer had not provided the valid VAT Reg. No. for the purposes of VAT. The German finance office did not acknowledge the VAT exemption and performed a supplementary assessment of German VAT on the level of the seller.

The subject matter of the question referred to the Advocate General was whether the finance office was in this case entitled to doubt the VAT exemption of what amounted to an intra-community delivery.

In his opinion of 6 April 2016, the Advocate General explained that the seller must not be denied the right to VAT exemption solely because the buyer failed to produce a valid VAT Reg. No., in a situation in which nothing points towards fraudulent behavior and in which all other conditions for a VAT exemption were satisfied, i.e., there is proof of the actual delivery of goods to another member state.

Source: Opinion of Advocate General Henrik Saugmandsgaard Øe of 6 April 2016 Council Directive 2006/112/EC


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