Advocate General Ettema concludes that, for example, to apply the zero rate, X does not have to have the German or Polish VAT identification number of Z.
According to the AG, this applies both before and after January 1, 2020, when the quick fixes have come into effect.
A-G Ettema has reached a conclusion on the question whether a trader must have a specific VAT identification number of his customer in order to be allowed to apply the zero rate for intra-Community supplies. With the entry into force of the ‘quick fixes’, a package of amendments to Directive 2006/112/EC (the VAT Directive) in the field of the levying of VAT on cross-border goods transactions within the EU, the answer to this question will become considerably more important from 1 January 2020.
Interested party in this case supplied intra-Community mobile phones to a UK customer. Although the phones have been transported to Germany and Poland, the customer has communicated its UK VAT identification number to the interested party. In Germany and Poland she was not identified for VAT purposes. Further down the commercial chain, fraud appears to have taken place. The UK authorities removed the UK VAT identification number of the customer from the VAT Information Exchange System (VIES) shortly after the supplies of the interested party because of indications – freely translated – that the customer was a rogue trader. The Inspector refused to apply the zero rate on the grounds that the interested party did not have a German and a Polish VAT identification number for its customer and thus did not do everything that could reasonably be expected of it to prevent it from being involved in the fraud or knew or should have known about the VAT fraud.
In the opinion of the Court of Appeal of ‘s-Hertogenbosch, the interested party did not need to have a German and a Polish VAT identification number of its customer in order to meet the formal condition laid down in Article 12(2)a(2o) of the Turnover Tax Implementation Decree 1968 (UBOB). It is sufficient for it to have the UK VAT identification number, which at the time of the supplies was included as valid in the VIES. Article 214 of the VAT Directive (on the obligation for Member States to facilitate the identification of taxable persons) does not make this any different. Furthermore, in the view of the Court of Justice, the Inspector did not prove that the person concerned knew or should have known that the supply of the telephones to its customer constituted fraud by that customer or fraud at later stages of the commercial chain. For the rest, it is not disputed that the interested party met the (material) conditions for the application of the zero rate.
Following the appeal in cassation by the State Secretary of Finance, A-G Ettema concludes that the condition for the application of the zero rate in Article 12(2)a(2o) of the UBOB does not mean that a trader must have the VAT identification number of the customer allocated by the EU Member State of arrival of the shipment or transport of goods supplied within the EU. In its opinion, this applies both before and after 1 January 2020, when the quick fixes take effect. The amended text of Article 12(2)a(2o) of the VAT Directive (and Article 138(1) of the VAT Directive) with effect from 1 January 2020 makes it even clearer than the previous text that a VAT identification number of the customer issued by a Member State other than that in which the dispatch or transport of goods begins is sufficient. Nothing else follows from various explanations. Moreover, in the light of the existence of so-called number acquisition, this explanation is obvious.
However, even if the interested party had not complied with the formal condition laid down in Article 12(2)a(2o) of the PDO, this would not, in view of, inter alia, the judgment of the Court of Justice in the Plöckl case, as such, justify its refusal to apply the zero rate. Finally, according to the A-G, the finding of the Court that the Inspector did not prove that the interested party knew or should have known that the supply of the telephones to its customer constituted fraud by that customer, nor fraud in subsequent links of the commercial chain, is, according to the A-G, sufficiently reasoned and not incomprehensible.
Source: rechtspraak.nl (Dutch)
