On Sept 3, 2015, the ECJ issued its decision in the case C-526/13 (Fast Bunkering). The case related to the Exemption of a Supply of goods for the fuelling and provisioning of vessels used for navigation on the high seas in case the Supplies are made to intermediaries acting in their own name
Context: Directive 2006/112/EC — Article 148(a) — Supply of goods — Definition — Exemption — Supply of goods for the fuelling and provisioning of vessels used for navigation on the high seas — Supplies to intermediaries acting in their own name
Article in the EU VAT Directive
Article 148(a) of the VAT Directive 2006/112/EC
Article 148
Member States shall exempt the following transactions:
(a) the supply of goods for the fuelling and provisioning of vessels used for navigation on the high seas and carrying passengers for reward or used for the purpose of commercial, industrial or fishing activities, or for rescue or assistance at sea, or for inshore fishing, with the exception, in the case of vessels used for inshore fishing, of ships’ provisions;
Facts
- FBK is registered for VAT in Lithuania.
- Between 1 October 2008 and 31 December 2011, FBK supplied fuel, within Lithuanian territorial waters to vessels used for navigation on the high seas. The fuel concerned came from non-member States and was stored in Lithuania under customs warehousing arrangements. Under those arrangements, the collection of VAT for the import of that fuel was suspended so long as it was not released into free circulation in the European Union.
- When FBK received an order, the corresponding fuel was taken from the customs depot and FBK carried out the necessary formalities. The fuel was then sold ‘free on board’, that is to say without transport or other related taxes and costs and without insurance, and FBK itself loaded the fuel into the vessels’ fuel tanks.
- However, the orders were sent to FBK not by the ships’ operators but by intermediaries established in various Member States, to which FBK invoiced the sales. Those intermediaries acted in their own name, both with regard to FBK and to the operators of the vessels, buying from the former and selling to the latter. At the hearing, FBK’s representative explained that those intermediaries never took physical delivery of any fuel, their role being essentially to centralise orders and to ensure payment of the fuel delivered. It was only once it was loaded into the fuel tanks of the vessels that FBK was in a position to determine the actual amount transferred and thus to draw up the corresponding invoice.
- Starting from the principle that the sale of the fuel at issue was exempt from VAT, in accordance with the Lithuanian law transposing Article 148(a) of Directive 2006/112, FBK applied a zero rate of VAT to those deliveries of fuel.
- On 15 February 2013, following a tax inspection for the period mentioned in paragraph 11 of this judgment, the Klaipėdos apskrities valstybinė mokesčių inspekcija (‘the Klaipėda tax inspectorate’) drew up a report, in which it stated that it was of the view that since the fuel at issue was not sold directly by FBK to the operators of the vessels, but to intermediaries acting in their own name, the latter must be regarded as having sold the fuel to those operators. Consequently, FBK could not apply the exemption laid down in Article 44(1) of the Law on VAT, because that exemption applies only where there is a supply of goods to the operators of seagoing vessels intended for international carriage of passengers and/or goods.
Questions
Must Article 148(a) of Directive 2006/112 1 be interpreted as meaning that the provisions of that paragraph concerning exemption from VAT are applicable not only to supplies to the operator of a vessel used for navigation on the high seas, who uses those goods for provisioning the vessel, but also to supplies other than to the operator of the vessel, that is to say, to undisclosed intermediaries, where at the time of the supply the ultimate use of the goods is known in advance and duly established, and evidence confirming this is submitted to the tax authority in accordance with the legislative requirements?
AG Opinion
Where, in the conditions defined in Article 148(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, it is established that a seller delivers goods for the fuelling and provisioning of a vessel (a) directly to the operator of the vessel in such a way that (b) the latter immediately and unconditionally acquires, and the seller simultaneously loses, the right to dispose of those goods as owner and (c) no other person acquires or loses such a right over the same goods, then the transaction by which the seller transfers that right, the transaction by which the operator of the vessel acquires the same right and any intermediate transactions by which third parties may acquire and pass on rights which do not include that of disposing of the goods as owners are to be exempted from VAT.
In other circumstances, only the transaction whereby the operator of the vessel acquires the right to dispose of the goods as owner is to be exempted from VAT pursuant to that provision.
In all cases, it is for the competent national court to determine, in the light of the relevant facts, who acquires, and at what stage, the right actually to dispose of the goods as if he were their owner, such determination not being dependent solely on the transfer of legal ownership of the goods according to the applicable law.
Decision
Article 148(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the exemption provided for in that provision is not, in principle, applicable to supplies of goods for the fuelling and provisioning to intermediaries acting in their own name, even if, at the date on which the supply is made the ultimate use of the goods is known and duly established and evidence confirming this is submitted to the tax authority in accordance with the national legislation. However, in circumstances such as those at issue in the main proceedings, that exemption may apply if the transfer to those intermediaries of the ownership in the goods concerned under the procedures laid down by the applicable national law took place at the earliest at the same time when the operators of vessels used for navigation on the high seas were actually entitled to dispose of those goods as if they were the owners, a matter which is for the national court to ascertain.
Source
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