ECJ Case C-276/18 (KrakVet) – Questions – Transport under distance sales regime

Preliminary questions were asked to the ECJ on 13 June 2018 in Case C-276/18 – KrakVet

Simplified summary of the facts:

Krakvet in Poland sells products for animals to customers in Hungary via a website (www.zoofast.hu). KrakVet used the so-called distance selling rules, meaning that in so far as the sales were below the threshold, KrakVet charged Polish VAT to the Hungarian non-business customers.
The products are transported by and on behalf of KrakVet from Poland to Hungary, using a Polish transport company (“KBGT”). The goods were delivered a two distribution points in Hungary, from where a Hungarian transportation company delivered the goods to customers.
The Hungarian tax authorities raised an assessment with KrakVet, arguing that KrakVet had performed domestic supplies in Hungary. According to the Hungarian tax authorities, the transport had started in Hungary, and not in Poland.
KrakVet did not agree, and argued that according to the Polish rules, it was making distance sales, subject to Polish VAT. This resulted in double taxation.

Questions asked to the ECJ (summary):

Do the Hungarian tax authorities infringe the VAT rules on administrative cooperation and the combating of VAT fraud by levying Hungarian VAT without consultation with the Polish tax authorities, thus creating a situation of double taxation?

How should the concept of ‘transport by or on behalf of the supplier’ (the transport requirement from the distance selling scheme) be interpreted in a situation where the seller gives the buyer the opportunity to opt for a carrier, with which the seller cooperates or for another carrier? This is a situation in which the buyer and the transporter conclude a transport agreement without the intervention of the seller. The Polish court also wants to know whether there is abuse of rights when KrakVet circumvents the application of the distance selling scheme by arranging transport in this way.

Source: Curia