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ECJ C-446/13 (Fonderie 2A) – Judgment – Place of supply of goods; work on goods

Source Curia

Decision

Article 8(1)(a) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, as amended by Council Directive 95/7/EC of 10 April 1995, must be interpreted as meaning that the place of supply of goods sold by a company established in a Member State to a person established in another Member State, and on which the vendor, to make them fit to be supplied, has had finishing work carried out by a service provider established in that other Member State, before having them dispatched by the service provider to the person to whom they are being supplied, must be deemed to be in the Member State where the latter is established.

Background

The CJEU ruled that the delivery of the metal parts takes place in France. The finished goods are already in France at the time of the start of the shipment to Atral.

The Italian Société Fonderie 2A manufactures metal parts. In 2001 it sells parts to the French Atral. Because the metal parts still have to be painted, Fonderie sends the parts to Saunier-Plumaz in France. After it has painted the parts, Saunier-Plumaz sends the parts to Atral. Fonderie is requesting a refund of the VAT charged by Saunier-Plumaz in France. However, the French tax authorities state that Fonderie has carried out taxable transactions in France: sending the painted metal parts from Saunier-Plumaz to Atral. According to the French tax authorities, Fonderie should have submitted a VAT return in France in which it should have declared the taxable supply of goods in France. Fonderie could then only have deducted the amount of its right to deduct input tax from the VAT to be paid on that basis. The French court has referred a preliminary question in this case.

The Court of Justice of the EU (CJEU) ruled that the delivery of the metal parts in this case takes place in France. The CJEU hereby points out that the finished goods are already in France at the time of the start of the shipment to Atral. Furthermore, the CJEU considers it important that Fonderie has not transferred the power to dispose of these goods as an owner to Saunier-Plumaz. According to the CJEU, the shipment to Saunier-Plumaz is only intended to bring the goods concerned into conformity with Fonderie’s contractual obligations. The goods are then sent to the buyer.

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