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Flashback on ECJ Cases – C-492/13 (Traum) – Exemptions (zero rate) for intra-Community transactions – Buyer who is not registered for VAT purposes – Obligation for the seller to prove the authenticity of the signature of the buyer or his representative

Om October 9, 2014, the ECJ issued its decision in the case C-492/13 (Traum).

Context: Reference for a preliminary ruling — Taxation — VAT — Directive 2006/112/EC — Article 138(1) — Exemptions for intra-Community transactions — Purchaser not registered for VAT purposes — Whether the vendor is required to establish the authenticity of the signature of the purchaser or his representative — Principles of proportionality, legal certainty and protection of legitimate expectations — Direct effect)


Article in the EU VAT Directive

Articles 138(1) and 139(1), second subparagraph of the EU VAT Directive 2006/112/EC.

Article 138 (Exemption related to Suppky of goods – Intra-Community Supply of goods)
1. Member States shall exempt the supply of goods dispatched or transported to a destination outside their respective territory but within the Community, by or on behalf of the vendor or the person acquiring the goods, for another taxable person, or for a non-taxable legal person acting as such in a Member State other than that in which dispatch or transport of the goods began.

Article 139
1. The exemption provided for in Article 138(1) shall not apply to the supply of goods carried out by taxable persons who are covered by the exemption for small enterprises provided for in Articles 282 to 292.
Nor shall that exemption apply to the supply of goods to taxable persons, or non-taxable legal persons, whose intra-Community acquisitions of goods are not subject to VAT pursuant to Article 3(1).


Facts

  • In September and October 2009, Traum was engaged in the general construction of buildings and works of art. In its VAT return in respect of the period from 1 September to 31 October 2009, Traum declared that it had made intra-Community supplies of knife blocks and blanks, exempt from VAT, to the company Evangelos gaitadzis, established in Greece, producing documents referred to in Article 45 of the regulation implementing the ZDDS, namely two invoices containing the Greek VAT identification number of Evangelos gaitadzis, acceptance and handover reports, international consigment notes and a signed certificate attesting receipt of the goods.
  • After carrying out, on 7 October 2009, a search in the electronic database of the VAT Information Exchange System (VIES) (‘the VIES database’), the Bulgarian tax authorities, on 2 November 2009, issued an offset and refund notice with regard to Traum. In that notice, it stated that a search in the VIES database had shown that Evangelos gaitadzis was registered for VAT purposes and had had a valid VAT identification number since 15 November 2005.
  • However, Evangelos gaitadzis neither declared the intra-Community acquisition nor paid VAT in Greece.
  • In a later VAT inspection, the Bulgarian tax authorities again consulted the VIES database and this time found that Evangelos gaitadzis had been de-registered for VAT purposes since 15 January 2006. Therefore, on 17 May 2011, those authorities issued an adjustment notice with regard to Traum, rendering the sale transactions to Evangelos gaitadzis subject to VAT on that ground that that company was not registered for VAT purposes in another Member State, so that the condition for exemption from VAT that the purchaser must be a taxable person, as provided for in Article 7(1) of the ZDDS, was not satisfied.
  • Having lodged an administrative appeal against that adjustment notice with the Direktor, Traum on that occasion produced the offset and refund notice issued by the Bulgarian tax authorities, which stated that Evangelos gaitadzis had a valid VAT identification number at the time of the transaction.
  • By decision of 5 August 2011, the Direktor confirmed the adjustment notice on the basis that there was no evidence of the transport of the goods outside Bulgaria and no written confirmation of receipt of the goods by the purchaser. The Direktor maintained that the certificate attesting receipt of the goods in question and the acceptance and handover reports submitted contained no information as to the exact address at which the goods were accepted or the identity, position or power of representation of the person who accepted the goods on behalf of Evangelos gaitadzis, so that those documents had no probative force.
  • In support of its action before the Administrativen sad Varna (Varna Administrative Court) against the Direktor’s decision, Traum submits that it provided the Bulgarian tax authorities with all the documents required by both the ZDDS and by the regulation implementing the ZDDS, proving that there had been an intra-Community supply. Furthermore, it argues that it carried out the transactions in question in good faith, having verified the VAT identification number of Evangelos gaitadzis in the VIES Database before concluding the transactions at issue.
  • The referring court observes that, with regard to the application of Article 7(1) of the ZDDS concerning the means of proving that goods had been transported within the Community and accepted in another Member State, Bulgarian case-law contains contradictory decisions as regards the probative force of international consignment notes. In that regard, it raises the issue whether the evidentiary requirements applied under Bulgarian law are in conformity with EU law.

Questions

Is the requirement giving entitlement to tax exemption under Article 138(1) of Directive 2006/112/EC1 fulfilled and is there no exception under the second paragraph of Article 139(1) of the Directive in circumstances such as those in the main proceedings in which it was established that the absence of the characteristic of a ‘person registered under the ZDDS’ in respect of the acquirer of the goods was indicated in the Union database after the actual supply, but the applicant claims that it acted with due diligence by obtaining information in this system which is not documented? The late recording of the characteristic of a ‘person registered under the ZDDS’ emerges from hard copies/information of the tax authorities.

Are the principles of fiscal neutrality, proportionality and protection of legitimate expectations violated by administrative practice and case-law according to which it is for the vendor – the consignor under the transport contract – to determine the authenticity of the acquirer’s signature and to establish whether it comes from a person representing the company (the acquirer), one of its employees in a corresponding position or an authorised person?

In a case such as the present does Article 138(1) of Directive 2006/112/EC have direct effect, and can the national court directly apply the provision?


AG Opinion

None


Decision

1. Articles 138(1) and 139(1), second subparagraph, of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2010/88/EU of 7 December 2010, must be interpreted as precluding, in circumstances such as those in the main proceedings, the tax authorities of a Member State from refusing to grant an exemption from value added tax in respect of an intra-Community supply of goods on the ground that the purchaser was not registered for value added tax purposes in another Member State and the supplier has proven neither the authenticity of the signature on the documents submitted in support of its declaration in respect of a supply it claims to be exempt from value added tax nor that the person who signed those documents on behalf of the purchaser had the authority to represent the purchaser, where the evidence establishing entitlement to the exemption submitted by the supplier in support of its declaration is consistent with the list of documents to be submitted to those authorities under national law and has been accepted by them, initially, as supporting evidence, which is a matter for the referring court to verify.

2. Article 138(1) of Directive 2006/112, as amended by Directive 2010/88, must be interpreted as having direct effect, so that it may be relied upon by taxable persons before national courts against the State in order to obtain an exemption from value added tax in respect of an intra-Community supply of goods.


Summary 

Exemptions (zero rate) for intra-Community transactions – Buyer who is not registered for VAT purposes – Obligation for the seller to prove the authenticity of the signature of the buyer or his representative

The zero rate for an intra-Community supply may not be refused because the customer was not registered for VAT in another Member State and the supplier has not proved that the signature on the documents submitted in support of his declaration of the supply which he considers to be exempt nor that the person who signed those documents on behalf of the buyer was authorized to represent, even though the supporting documents submitted by the supplier in support of his declaration for the entitlement to exemption were in accordance with the list established by national law of documents to be handed over to this authority and initially accepted as supporting documents by the tax authorities.

Article 138(1) of the VAT Directive has direct effect, so that taxable persons can rely on that provision before the national court against the State in order to obtain the zero rate for an intra-Community supply.


Source:


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