Opinion of Advocate General SHARPSTON of 12 July 2018 in Case C‑495/17 (Cartrans Spedition Srl)
Simplified facts:
- Cartrans Spedition SRL (‘Cartrans’), a road transport services broker, the head office of which is located in Romania, supplied services relating to the transport of goods to several non-EU countries.
- The Romanian tax authorities performed a VAT audit and concluded that Cartrans had failed to demonstrate that the goods transported had in fact been exported, as Cartrans had not produced any of the following documents: a contract of carriage drawn up with the beneficiary of the service, specific documents of carriage and documents showing that the goods transported were exported, in accordance with national rules. Cartrans had merely demonstrated that it had supplied certain transport services abroad to exporters.
- Cartrans challenged that assessment. In support of its request for exemption from VAT it produced TIR carnets and CMR consignment notes certified by customs officials of the countries to which Cartrans had transported the goods. Cartrans claimed that the TIR carnets contained references to both the goods transported and the certifications by the customs authorities concerning the export of the goods to the respective countries and that the TIR carnet clearly therefore had evidential value, since it was the document certifying customs transit from a customs office of departure to a customs office of destination.
- The Romanian court considers that an interpretation of the provisions of the VAT Directive concerning exemptions on export and for the supply of services by intermediaries is necessary in order to resolve the main proceedings. It has therefore referred the following questions to the Court for a preliminary ruling:
- Does a TIR carnet certified by the customs authorities of the country of destination constitute a document which proves that the goods transported were indeed exported?
- Is an EU Member State allowed to have a tax practice which requires a taxpayer to prove that goods transported were exported exclusively by means of a customs export declaration, with the result that the right to deduct VAT for transport services in respect of goods exported will be refused in the absence of that declaration, even if a TIR carnet certified by the customs authorities of the country of destination exists?
Assessment
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24. The Romanian Government is of the view that the VAT Directive permits Member States to reject requests for exemption from tax under Article 146(1)(e) of the VAT Directive in circumstances such as those in the main proceedings. Cartrans and the Commission contest that view.
25. I also disagree with the Romanian Government.
26. There are two points of common ground between the parties. First, in so far as it is clear that Article 146(1)(e) of the VAT Directive concerns exemption from tax for exports from the European Union, it is in conformity with the general principle of international tax law that tax should be imposed on the consumption of goods and services at the place of destination. Thus, all operations concerning exports are generally exempt from tax. Second, since that provision permits an exemption from tax it should be interpreted strictly.
27. The exemptions provided for in Chapter 6 of the VAT Directive (‘Exemptions on exportation’) are mandatory. Thus, where a taxpayer is able to demonstrate the supply of transport and ancillary services within the meaning of Article 146(1)(e), the exemption provided must be granted. In the absence of express provision Member States do not retain a discretion to introduce additional substantive conditions.
28. The Court’s case-law makes it clear that there must be a direct link between the transport of goods to a destination outside the European Union and the relevant services in order for the exemption provided for in Article 146(1)(e) of the VAT Directive to apply. In other words, the services must be supplied directly to (as the case may be) the exporter, the importer or the consignee of the goods referred to in that provision. (15) Those are matters for the referring court to assess in its examination of the facts and circumstances of the case at issue.
29. The order for reference makes plain that under national rules transport relating to the export of goods is a service that is exempt from VAT only if the taxpayer concerned is able to produce the following documents as proof: an invoice issued by the carrier, a contract of carriage drawn up with the beneficiary of the service, specific documents of carriage and documents showing that the goods transported were exported (‘the required documents’).
30. It seems to me that a national practice which requires a taxpayer to prove that the transported goods were indeed exported is not compatible with EU law. Article 146(1)(e) of the VAT Directive does not contain any such requirement. Rather, that provision lays down the condition that the supply of services including transport is to be directly connected with the exportation of goods.
31. Moreover, I agree with the Commission that there is no provision in the VAT Directive imposing a condition that a taxpayer is to furnish specific evidence in order to benefit from the exemption provided for in Article 146(1)(e).
(…)
38. The principle of fiscal neutrality requires that exemption from VAT must be granted if the substantive conditions are met, even if the taxpayer has not complied with certain formalities. (25) There are only two instances in which the failure to comply with formal requirements has led to losing a right to exemption from VAT. (26) One is in cases of fraud. (27) The second is where exemption is refused if the breach of the rules at issue has the effect of preventing proof that certain substantive conditions have been met being brought to the competent authorities’ attention. (28)
39. It is not disputed in the main proceedings that Cartrans did supply services within the meaning of the VAT Directive and that those services were supplied outside the territory of the European Union. Given that context, a national practice which means that the competent authorities will not examine evidence indicating that the goods at issue were delivered to a buyer (or consignee) situated in a third country operates in a manner akin to a presumption that the exemption cannot be granted.
40. It seems to me that the national rules at issue go beyond what is necessary to ensure the correct collection of tax for the following reasons. First, the referring court states that where a taxpayer is unable to provide the required documents in support of a claim for exemption, a claim will be refused. That outcome is incompatible with the principle of fiscal neutrality inasmuch as VAT will not be imposed at the destination of the goods, but instead at a point where they are in transit. (29) Second, the national rules at issue are applied in a manner which means that the competent authorities do not even consider whether the substantive conditions for exemption on the basis of Article 146(1)(e) of the VAT Directive are in fact satisfied if the formal requirements are not met. Third, nothing in the order for reference suggests that a failure to meet the formal requirements necessarily gives rise to an instance of fraud or that breach of the rules at issue has the effect of preventing the competent authorities from establishing whether the substantive conditions were met.
41. It follows that the authorities of a Member State cannot in principle refuse to grant an exemption from VAT without examining whether the substantive conditions laid down by the applicable provisions of EU law have been met merely on the ground that the taxpayer concerned has not furnished certain specific documents to prove that the goods at issue were indeed exported.
42. Should the TIR carnet be regarded as definitive proof that the goods concerned were exported?
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48. That sketch of the main features of the TIR system confirms that the purpose of a certified TIR carnet is not to prove that the goods concerned were in fact exported. Rather, that system demonstrates that ‘the TIR carnet is a customs declaration for transport of goods. It provides proof of the existence of the guarantee’.
49. As the customs regime for transit (of which TIR operations form part) and export are distinct, the TIR carnet cannot be assimilated to a customs declaration issued when goods leave the EU customs territory as laid down in Article 182a of the Customs Code.
(…)
51. In my Opinion, a taxpayer such as Cartrans, therefore, does not have to go so far as to prove that the goods concerned were actually exported. What it needs to show is that the transport services supplied were directly connected with the export of goods. The procedure for establishing that fact is not governed by EU rules and is ultimately a matter for national authorities subject to the supervision of national courts. That said, whilst the TIR carnet is not necessarily conclusive proof of export, it seems to me to be a document that is indeed relevant in the context of assessing whether transport services provided are directly connected with the export of the goods carried by the road haulier concerned. In the absence of evidence suggesting that the goods covered by the TIR carnet were not in fact exported, it would seem to me to provide strong evidence in support of a claim for exemption from VAT under Article 146(1)(e) of the VAT Directive. (37)
Conclusion
52. In the light of all the foregoing considerations, I am of the opinion that the Court should answer the questions posed by the Tribunalul Prahova (Tribunal, Prahova, Romania) as follows:
Articles 146(1)(e) and 131 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax should be interpreted as precluding national rules which require the production of specific documents to prove that goods transported by a taxpayer supplying road transport services to a destination outside the territory of the European Union were indeed exported. It is for the competent authorities, subject to the supervision of the national courts, to examine and assess the evidence in any particular case. That evidence may include reference to the TIR carnets as described in the Convention on the international transport of goods under cover of TIR carnets annexed to Council Decision 2009/477/EC of 28 May 2009 publishing in consolidated form the text of the Customs Convention on the international transport of goods under cover of TIR carnets (TIR Convention) of 14 November 1975 at Geneva as amended since that date, in order to establish whether the goods concerned physically left the territory of the European Union and thus whether the transport services supplied were directly connected with the export of goods.
Source: Curia
