On 11 June 2020, the European Court of Justice has given its judgment in case C-242/19 (CHEP Equipment Pooling). The case deals with an 8th Directive VAT refund request and the question if the non-resident company claiming the VAT should have registered locally for VAT purposes.
Articles in the EU VAT Directive
- EU VAT Directive 2006/112/EU
- Article 17(2)(g) — Transfer of movable property within the European Union with a view to the supply of services
- Articles 170 and 171 — Right to VAT refund of taxable persons not established in the Member State of refund
- Directive 2008/9/EC — Concept of ‘taxable person not established in the Member State of refund’ — Taxable person not identified for VAT purposes in the Member State of refund
The Romanian court was struggling to find out how to process an 8th Directive VAT refund request. The authorities denied that request and argued that CHEP Pooling should have been VAT registered due to its fictitious intra-Community transactions, and should have claimed the input VAT via a regular VAT return. The question was raised if the transport of pallets from one EU country to another (to be leased in the arrival country) should be treated as a transfer as one of the exceptions listed in article 17(2) of the VAT Directive (which are not considered as a fictitious intra-Community transactions).
Does the transport of pallets from one Member State to another Member State, for the purposes of their subsequent rental in the latter Member State to a taxable person established and registered for VAT purposes in Romania, constitute a non-transfer in accordance with Article 17(2) of Directive [2006/112/EC]?
Irrespective of the answer to the first question, is the taxable person under Article 9(1) of Directive 2006/112/EC, who is not established in the Member State of refund but in the territory of another Member State, considered a taxable person under Article 2(1) of Directive 2008/9/EC, even where that person is registered for VAT purposes or would be required to be registered for VAT purposes in the Member State of refund?
In the light of the provisions of Directive 2008/9/EC, does the condition of not being registered for VAT purposes in the Member State of refund constitute a further condition to those laid down in Article 3 of Directive 2008/9/EC in order that a taxable person established in another Member State and not established in the Member State of refund may be entitled to a refund in a case such as the present?
Must Article 3 of Directive 2008/9/EC be interpreted as precluding a practice of a national administration of refusing to refund VAT on grounds of failure to satisfy a condition laid down exclusively in national law?
1. Article 17(2)(g) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2008/8/EC of 12 February 2008, must be interpreted as meaning that the transfer, by a taxable person, of goods from a Member State to the Member State of refund, for the purposes of the supply by that taxable person of services for the hiring out of those goods in the latter Member State, shall not be treated as an intra-community supply where the use of those goods for the purposes of such a supply is temporary and they have been dispatched or transported from the Member State in which that taxable person is established.
2. The provisions of Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State, must be interpreted as precluding a Member State from denying the right to a refund of value added tax to a taxable person established in the territory of another Member State on the sole ground that that taxable person is or should have been identified for value added tax purposes in the Member State of refund.
- BTW Jurisprudentie (unofficial translation in English)
- Wolters Kluwer (Unofficial translation in English)
- Deloitte Slovenia
- Grant Thornton
- Less Grey – VAT4U NL
- Deloitte – Impact on the Life Sciences & Health Care sector