Roadtrip through ECJ Cases – Focus on the Exemption for Intra-Community supplies of goods (Art. 138)

Last update: July 7, 2026

Importance of Article 138 of the EU VAT Directive 2006/112/EC:

Exemption for Intra-Community Supplies: Article 138 exempts supplies of goods transported between EU Member States from VAT, facilitating seamless trade and preventing multiple tax charges on intra-Community transactions.
Promoting Internal Market Efficiency: This exemption reduces administrative burdens for businesses, encouraging cross-border trade and fostering a more integrated internal market within the EU.
Alignment with the Destination Principle: Article 138 supports the destination principle of VAT, ensuring that tax revenues are allocated to the Member State where goods are consumed, promoting fair tax distribution among EU countries.

Article in the EU VAT Directive 2006/112/EC

Article 138

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.
2. In addition to the supply of goods referred to in paragraph 1, Member States shall exempt the following transactions:

(a) the supply of new means of transport, dispatched or transported to the customer at a destination outside their respective territory but within the Community, by or on behalf of the vendor or the customer, for taxable persons, or non-taxable legal persons, whose intra-Community acquisitions of goods are not subject to VAT pursuant to Article 3(1), or for any other non-taxable person;
(b) the supply of products subject to excise duty, dispatched or transported to a destination outside their respective territory but within the Community, to the customer, by or on behalf of the vendor or the customer, for taxable persons, or non-taxable legal persons, whose intra-Community acquisitions of goods other
than products subject to excise duty are not subject to VAT pursuant to Article 3(1), where those products have been dispatched or transported in accordance with Article 7(4) and (5) or Article 16 of Directive 92/12/EEC
(c) the supply of goods, consisting in a transfer to another Member State, which would have been entitled to exemption under paragraph 1 and points (a)>and (b) if it had been made on behalf of another taxable person.

ECJ Cases Decided

ECJ Cases – Pending

The ECJ cases regrouped by Article 138 VAT Directive sub-theme:

🔗 Chain Supplies & Allocation of Transport under Art. 138

C-245/04 (EMAG Handel Eder OHG)

Foundational ruling: in a chain supply with a single intra-Community transport, only one supply can qualify for the Art. 138 exemption.
The transport must be ascribed to one specific transaction; the other is a domestic supply in the MS of dispatch or destination.
Set the doctrinal basis for applying Art. 138 in chain transactions.

C-430/09 (Euro Tyre Holding)

Where two successive supplies are linked to one intra-EU transport, Art. 138 exemption can only apply to one of them.
Attribution depends on when the power to dispose as owner transfers to the final buyer.
If the intermediary informed the first supplier of onward resale before dispatch, Art. 138 applies to the second supply.

C-386/16 (Toridas)

In a chain of two supplies with a single intra-EU transport, Art. 138 applies only to the supply to which the transport can be ascribed.
Requires an overall assessment of the circumstances, particularly the moment of ownership transfer.
If the intermediary notified onward resale before dispatch, exemption applies to the second supply.

C-414/17 (Arex) – Excise goods

Allocation of the intra-EU transport under Art. 138 depends on the transfer of power to dispose as owner, not on excise duty rules.
Excise suspension and Art. 138 operate independently.
Confirms Euro Tyre Holding principles apply also to excise goods.

C-401/18 (Herst) – Excise goods

Art. 138 transport is attributed to the transaction under which the acquirer obtained the right to dispose of the goods as owner.
Assessment must be based on economic ownership, not mere legal title.
Excise duty suspension does not determine Art. 138 attribution.

🛡️ Good Faith & Fraud Protection under Art. 138

C-409/04 (Teleos and others)

Art. 138 exemption cannot be withdrawn from a supplier acting in good faith with objective evidence, even if the buyer’s evidence turns out to be forged.
Tax authorities cannot shift the entire fraud risk onto diligent suppliers.
Cornerstone ruling on good faith as a protective principle under Art. 138.

C-285/09 (R.) – Limits of good faith

Art. 138 exemption may be refused where the supplier deliberately conceals the identity of the true purchaser to enable VAT evasion.
Even if substantive conditions are met, participation in fraud disqualifies the supplier.
Establishes the anti-abuse limit to Art. 138.

C-108/17 (Enteco Baltic) – Import + Art. 138 (Customs 42)

Under Customs Procedure 42, a good-faith importer cannot be denied Art. 143(1)(d) exemption merely because the subsequent Art. 138 conditions are not fully met.
Formal deficiencies do not automatically defeat Art. 138 where good faith is established.
Extends Teleos protection to the import + Art. 138 interface.

📄 Substantive vs. Formal Conditions (Substance-over-Form)

C-146/05 (Collée) – Late proof

Art. 138 cannot be refused solely because required evidence was submitted late, if substantive conditions are met.
Fiscal neutrality requires exemption where the supply objectively took place.
Refusal only justified if delay causes a real risk of tax revenue loss.

C-84/09 (X) – No transport deadline

Classification as an Art. 138 supply cannot depend on a national time limit for the start or completion of transport.
Decisive factor is the objective link between supply and physical movement to another MS.
National transport deadlines are incompatible with Art. 138.

C-587/10 (VSTR) – VAT ID not always required

Art. 138 cannot be refused solely because the supplier failed to provide the buyer’s VAT ID, if good faith is established.
The VAT ID was, at that time, a formal requirement — not a substantive condition (pre-Quick Fixes).
Primacy of substance over form absent indications of fraud.

C-273/11 (Mecsek-Gabona) – Retroactive VAT ID deletion

Art. 138 cannot be denied because the buyer’s VAT ID was retroactively deleted after the supply.
Supplier’s good faith at the time of the transaction is decisive.
VAT ID validity is a formal indicator, not a substantive condition (pre-Quick Fixes).

C-492/13 (Traum) – Buyer not registered / signature authenticity

Art. 138 cannot be refused simply because the buyer was not VAT-registered in the destination MS.
Supplier cannot be required to prove authenticity of signatures on transport documents.
Legal certainty and proportionality protect good-faith suppliers.

C-21/16 (Euro Tyre) – Customer not in VIES

Art. 138 must be granted even where the customer is not registered in VIES nor subject to an IC acquisitions regime.
Non-registration is a formal shortcoming that does not override substance.
Pre-Quick Fixes primacy of substance over form.

🚗 Special Regimes – New Means of Transport (Art. 138(2)(a))

C-26/16 (Santogal M-Comércio)

Art. 138(2)(a) exemption for new means of transport cannot be conditional on the purchaser residing in the destination MS.
What matters is the transfer of power to dispose and physical dispatch to another MS.
Seller cannot be required to guarantee subsequent VAT payment by the buyer.

📚 Evidence & Burden of Proof under Art. 138

C-184/05 (Twoh International)

The MS of dispatch is not required to consult the buyer’s MS under mutual assistance rules to verify Art. 138 exemption.
The burden of proof rests entirely on the supplier.
Suppliers cannot rely on tax authority cooperation to fill gaps in their Art. 138 documentation.

C-664/21 (NEC Plus Ultra Cosmetics)

MS may refuse new Art. 138 evidence produced only during administrative appeal, if consistent with national procedure.
Effectiveness and neutrality do not require indefinite acceptance of late evidence.
Nuances Collée: procedural deadlines are enforceable under Art. 138.

C-639/24 (FLO VENEER) – Quick Fixes evidence

Art. 138 cannot be denied solely because the supplier lacks the specific evidence listed in Art. 45a Implementing Reg. 282/2011.
The Art. 45a presumption is rebuttable and non-exclusive.
Preserves the Collée / substance-over-form principle within the Quick Fixes framework.

⚙️ Post-Quick Fixes: Recipient’s Tax Status as Substantive Condition

C-676/22 (B2 Energy)

Art. 138 cannot be granted if the supplier fails to prove that the goods were delivered to a taxable person acting as such in another MS.
Under Quick Fixes (Art. 138(1)(b)), the recipient’s VAT status is a substantive condition.
Mere proof of transport is insufficient; recipient status is essential.

🌍 Interaction with Other Regimes (Export, Refund, Discounts)

C-802/19 (Firma Z) – Discounts and Art. 138

A pharmaceutical company making Art. 138 supplies to a pharmacy in another MS cannot reduce the taxable amount for discounts to statutory health insurance funds in that MS.
Art. 90 adjustments require the discount to occur within the same supply chain taxed in the same MS.
Distinguishes Elida Gibbs due to the jurisdictional split caused by Art. 138.

C-234/24 (Brose Prievidza) – Refund independent of Art. 138

Refund of input VAT under the 13th/8th Directive is not conditioned on goods being exported or subject to Art. 138 supplies.
Right to refund depends on input VAT being incurred on business activities, not the fate of the goods.
Confirms broad refund rights independently of Art. 138.

C-602/24 (W.) – Art. 138 exemption despite subsequent export

A supply may still qualify for Art. 138 exemption even if the goods are ultimately exported outside the EU, provided substantive Art. 138 conditions are met at the time of the supply.
Final extra-EU destination does not automatically re-characterize the supply as an Art. 146 export.
Art. 138 treatment depends on objective circumstances at the moment of the supply.

Podcasts

C-245/04 (EMAG Handel Eder OHG) – VAT on Intra-Community Chain Transactions