If a Belgian supplier dispatches goods to a warehouse in the Netherlands, then acquisition VAT accounting typically takes place in the Netherlands. The customer will normally quote its Dutch VAT number, but it could (pre-Brexit) have provided its UK VAT number. It just needed to be aware that (under the “fallback” provisions) HMRC could have collected UK VAT unless it could be shown that Dutch VAT had been accounted for.
In Ampleaward, the Court of Appeal has considered further complications that arise when the goods involved were alcoholic drinks transferred between bonded warehouses in the EU.
The CA thought that EU Member States were only able, under the Principal VAT Directive, to exempt sales in bonded warehouses in their own territory. The fallback provisions gave the UK competence to tax transactions which took place elsewhere, but could not extend the exemption to them. This meant that UK legislation, if it allowed exemption, went further than it should have done.
HMRC suggested three ways that VATA 1994 should be read so as to conform with the PVD. However, the CA rejected all three, on the basis that the Marleasing principle of interpretation could not be used to rewrite legislation laid down by Parliament. HMRC’s appeal was dismissed.
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