This is quite an interesting decision of the Czech Supreme Administrative Court. It relates to the VAT refunds to the Ukrainian natural persons that repeatedly bought heating devices (including boilers and heating units) and spare parts in CZ, exported them through Poland to Ukraine and requested CZ VAT refund. Czech tax authority declined to pay back the VAT to the goods seller on the grounds that the goods were not goods of noncommercial nature (article 147 of the VAT directive). Tax authority subsequently issued tax securing orders to the seller (meaning in practice that the entity cannot handle with their assets, bank accounts, etc.).
CSAC questioned the tax authority proceedings with reasons that generally if the goods leave the EU it should be VAT exempt (stating ECJ cases Navicon C-97/06, Vinš C-275/18). Based on that CSAC lifted the securing orders but did not ultimately decide whether the goods seller or the tax authority were correct. This will most probably be subject to further court proceedings.
It will be interesting what decision (if any) the court adopts, whether generally all goods that were exported out of the EU are VAT exempt or whether it is necessary to adhere to the VAT rules requiring that the goods exported should be of noncommercial nature.
Ondrej Stedry
Tax Adviser
Prague
Czech Republic
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