Judgment of the European Court of Justice (ECJ) on 8 November 2018 in Case C‑495/17 (Cartrans Spedition Srl) regarding the evidence that is necessary to prove the VAT zero-rate on export supplies.
Context: Reference for a preliminary ruling — Value added tax (VAT) — Directive 2006/112/EC — Exemptions — Article 146(1)(e) and Article 153 — Road transport operations directly connected with the exportation of goods — Supply of services by intermediaries taking part in such operations — Rules on proof that the goods were exported — Customs declaration — TIR carnet
Article in the EU VAT Directive
Articles 131, 146(1)(e) and 153 of the EU VAT Directive 2006/112/EC
Article 131 (Exemption – General Provision)
The exemptions provided for in Chapters 2 to 9 shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse.
Article 146(1)(e) (Exemptions on exportation)
1. Member States shall exempt the following transactions:
(e) the supply of services, including transport and ancillary transactions, but excluding the supply of services exempted in accordance with Articles 132 and 135, where these are directly connected with the exportation or importation of goods covered by Article 61 and Article 157(1)(a).
Article 153 (Exemptions for the Supply of Services by Intermediaries)
Member States shall exempt the supply of services by intermediaries, acting in the name and on behalf of another person, where they take part in the transactions referred to in Chapters 6, 7 and 8, or of transactions carried out outside the Community.
The exemption referred to in the first paragraph shall not apply to travel agents who, in the name and on behalf of travellers, supply services which are carried out in other Member States.
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?
Question
For the purposes of the VAT exemption for transport operations and services relating to the export of goods, in accordance with Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, 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, taking into account the procedure for such a customs transit document laid down in the Transit Manual (TIR procedure) No TAXUD/1873/2007 by the Customs Code Committee — Transit section, Directorate-General Taxation and Customs Union of the European Commission?
Does Article 153 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax preclude 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?
AG Opinion
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.
Decision
Article 146(1)(e) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, on the one hand, and that provision in conjunction with Article 153 of that directive, on the other hand, must be interpreted as precluding a tax practice of a Member State under which the exemption from value added tax for, respectively, the supply of transport services directly connected with the exportation of goods and the supply of services by intermediaries taking part in those supplies of transport services is subject to production by the taxable person of a customs export declaration in respect of the goods concerned. In that regard, it is for the competent authorities, for the purposes of granting those exemptions, to examine whether compliance with the condition relating to the exportation of the goods concerned can be inferred, with a sufficiently high degree of probability, from all of the information that may be available to those authorities. In that context, a TIR carnet which is certified by the customs offices of the third country of destination of the goods and which is produced by the taxable person constitutes evidence which, in principle, those authorities must duly take into account, unless they have specific reasons to doubt the authenticity or reliability of that document.
Summary
A Member State is not allowed to have a tax practice under which the exemption from value added tax for transport services directly linked to exports of goods and for services rendered by intermediaries involved in these transport services, is subject to the production by the person liable for the customs declaration of export of the goods concerned.
In this respect, it is for the competent authorities, for the purpose of granting such exemptions, to examine whether the fulfillment of the condition relating to the export of the goods concerned can be deduced with a sufficiently high degree of elements which these authorities are able to dispose of.
In this context, a TIR Carnet endorsed by the customs of the third country of destination of the goods produced by the person liable for payment constitutes an element which in principle falls upon those authorities to take due account, unless the latter have reasons to doubt the authenticity or reliability of this document.
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