Comments on ECJ C-602/24: Intra-Community Supply Requalified as Export, VAT Exemption Upheld

A Polish company faced a VAT exemption challenge for an intracommunity goods delivery to Lithuania, which were unknowingly transported to Belarus by the buyer.
Polish tax authorities refused the VAT exemption and demanded VAT application on the transaction.
The Warsaw administrative court referred a question to the Court of Justice of the European Union on July 12, 2024, registered on September 17, 2024.
The court sought clarification on interpreting the VAT directive regarding requalifying an intracommunity delivery as an export.
The Court ruled that the VAT directive allows exemption for deliveries initially declared as intracommunity, even if the export occurred without the supplier’s knowledge and was confirmed by customs documents.
The decision emphasized the principles of neutrality and proportionality in VAT, stating formal requirements should not hinder substantive exemption conditions.

The case addressed the refusal of a VAT exemption for goods exported outside the EU, specifically apples initially declared as intra-Community supplies to a UK customer, which were later found to be exported from Poland to Belarus without the supplier’s knowledge.
The CJEU highlighted that the ‘supply of goods’ is an objective concept, emphasizing that the export exemption requires the actual transfer of ownership and physical departure of goods from the EU, regardless of the supplier’s awareness or transport documentation.
The court ruled that VAT exemptions should be granted when substantive conditions are met, even if formal requirements are lacking, asserting that a refusal based solely on incorrect export documents is disproportionate when the export is confirmed by tax authorities and no fraud is involved.