European Court T-614/25 (Trading 4 v Valsts ieņēmumu dienests) – Judgment – Attribution of a Single Intra-Community Transport in a Triangular Chain Involving Excise Goods

Slide deck

On 9 September 2026, the General Court released the judgment in Case T-614/25 (AS ‘Trading 4’ v Valsts ieņēmumu dienests).

Summary

The case concerned a chain transaction involving excise goods sold by Latvian supplier Trading 4 to intermediaries established in Estonia and the United Kingdom, which immediately resold the goods to customers in other Member States, with only one intra-Community transport taking place.
The referring Latvian court asked whether the VAT exemption under Article 138(1) of Directive 2006/112 automatically applies where the goods move under an excise duty suspension arrangement, the final customer in the destination Member State is liable for VAT, and the goods physically leave the Member State of dispatch.
The General Court held that these factors are not sufficient in themselves to justify exemption. The decisive issue is to which supply in the chain the single intra-Community transport must be attributed.
The Court reaffirmed that the key criterion is the moment when the right to dispose of the goods as owner is transferred. National courts must undertake an overall assessment of the facts, including who organised and controlled the transport and when the final customer obtained disposal rights over the goods.
The Court concluded that neither the excise duty suspension arrangement nor the triangular transaction simplification under Articles 141 and 197 of the VAT Directive determines the VAT treatment of the first supply. The second question did not require an answer, and the third question was declared inadmissible because it was unrelated to the subject matter of the dispute.

Context

The request for a preliminary ruling concerned the interpretation of Article 138(1), read together with Articles 141 and 197(1), of Council Directive 2006/112/EC on the common system of value added tax, as amended by Directive (EU) 2016/1065. The dispute arose in the context of a chain of successive supplies involving a single intra-Community transport of petroleum products subject to excise duty and moved under a duty suspension arrangement. AS ‘Trading 4’, established and VAT-registered in Latvia, supplied the goods to VAT-registered intermediaries established in Estonia and the United Kingdom, which immediately resold them to customers in other Member States. The goods were transported directly from Latvia to those final customers. The referring court sought guidance on whether the use of an excise duty suspension arrangement, proof that the goods physically left Latvia, and application of the triangular transaction simplification under Articles 141 and 197(1) were sufficient to justify exemption of the first supply under Article 138(1), and how the transport should be attributed within the chain transaction.

Questions Referred

First question

Must Article 138(1) of the VAT Directive, read together with Articles 141 and 197(1), be interpreted as meaning that, where excise goods are supplied under a duty suspension arrangement in a triangular transaction and the taxable person established in the third Member State is liable for VAT, that fact alone constitutes a ground for exempting the supply made by the taxable person established in the first Member State to the intermediary taxable person established in the second Member State, provided that the goods actually left the first Member State and were delivered in the third Member State?

Second question

In a triangular transaction, must Article 138(1) be interpreted as meaning that, where the supplier established in the first Member State is aware that the intermediary established in the second Member State has already resold the goods to a taxable person established in the third Member State before the transport begins, the first supply is excluded from the VAT exemption?

Third question

Does Article 141 of the VAT Directive apply where, following a triangular transaction, the taxable person established in the third Member State resells the same goods during the course of the same single transport operation within the European Union?

AG Opinion

None.

The General Court decided, after hearing the Advocate General, to proceed directly to judgment without an Opinion.

Decision of the Court

The General Court held that Article 138(1) of Directive 2006/112, read together with Articles 141 and 197(1), must be interpreted as meaning that the following circumstances do not, in themselves, justify exemption from VAT of a supply made by a taxable person established in the first Member State to an intermediary acquiring the goods in the second Member State:

the goods are supplied under an excise duty suspension arrangement;
in the triangular transaction, the taxable person established in the third Member State is liable for VAT; and
it is proven that the goods physically left the first Member State and were supplied in the third Member State.

The Court emphasized that entitlement to the exemption depends on determining to which supply the single intra-Community transport must be attributed. That assessment requires examination of all the circumstances of the transaction, particularly the moment at which the right to dispose of the goods as owner was transferred.

The Court did not answer the second question because it had been referred only in the event that the first question was answered in the affirmative.

The third question was declared inadmissible because it was unrelated to the subject matter of the main proceedings.

Argumentation

(Conditions for the Intra-Community Supply Exemption)

The Court recalled that Article 138(1) requires three cumulative elements: the transfer of the right to dispose of goods as owner, transport or dispatch of the goods to another Member State, and physical departure of the goods from the Member State of supply. Only where those conditions are fulfilled can a supply qualify as an exempt intra-Community supply.

(Chain Transactions and Attribution of Transport)

Where two successive supplies give rise to only one intra-Community transport, that transport can be attributed to only one supply in the chain. Consequently, only one supply may benefit from the exemption under Article 138(1). Determining which supply is linked to the transport requires an overall evaluation of the factual circumstances.

(Transfer of the Right to Dispose of Goods as Owner)

The Court reiterated that the concept of the transfer of the right to dispose of goods as owner is an autonomous concept of EU law. It is not limited to formal legal ownership under national law. The decisive issue is whether a person obtained the power to deal with the goods as if it were the owner, including the ability to resell them or otherwise determine their economic destiny.

(Overall Assessment of the Facts)

The referring court must identify the point at which the final customer obtained the right to dispose of the goods as owner. If that second transfer occurred before the intra-Community transport began, the transport cannot be attributed to the first supply. The Court noted that relevant factors include who organised the transport, who assumed the associated economic burden, who exercised actual or functional control over the movement of the goods, and whether the transport formed part of the intermediary’s own commercial activity.

(Excise Duty Suspension Arrangement)

The Court rejected the argument that transport under an excise duty suspension arrangement determines the VAT treatment of the supplies. Such an arrangement does not affect the conditions governing the transfer of the right to dispose of the goods as owner. VAT consequences must be assessed independently from the excise duty regime.

(Electronic Administrative Document)

The signature of the electronic administrative document required under the excise duty legislation may provide evidence that the goods physically left the Member State of dispatch. However, it does not determine the moment when the right to dispose of the goods as owner is transferred and is therefore not decisive for attributing the transport within the chain transaction.

(Triangular Transaction Simplification)

The Court explained that Article 141 establishes a simplification mechanism for triangular transactions by relieving the intermediary from VAT registration obligations in the Member State of destination and shifting VAT liability to the final customer under Article 197. However, application of that mechanism presupposes the existence of an intra-Community acquisition by the intermediary and therefore cannot itself determine whether the first supply is an exempt intra-Community supply.

(Liability of the Final Customer)

The fact that the customer established in the third Member State is liable for VAT does not affect the assessment under Article 138(1). The VAT Directive does not make application of the exemption dependent upon the subsequent taxation of the transaction or upon identification of the final person liable for VAT.

(Inadmissibility of the Third Question)

The Court held that the third question was unrelated to the main proceedings. The dispute concerned Trading 4’s entitlement to apply the exemption under Article 138(1), whereas the requested interpretation of Article 141 concerned the VAT position of the intermediary traders. Accordingly, the question was inadmissible.

Source

Curia

References to Other ECJ Case Law

C-386/16, Toridas

Cited for the conditions applicable to the exemption under Article 138(1), the attribution of a single intra-Community transport within a chain transaction, and the need for an overall assessment of the circumstances to determine the relevant supply.

C-414/17, AREX CZ

Cited for the autonomous EU-law concept of the transfer of the right to dispose of goods as owner and for the principle that transport under an excise duty suspension arrangement does not determine the VAT treatment of the transaction.

C-401/18, Herst

Cited regarding the meaning of the right to dispose of goods as owner and the factors relevant to determining which party exercises control over the transport.

C-108/17, Enteco Baltic

Cited for the evidential value of excise movement documentation in proving that goods physically left the Member State of dispatch.

C-247/21, Luxury Trust Automobil

Cited for the definition of a triangular transaction and for the operation of the simplification mechanism under Article 141 of the VAT Directive.

C-312/24, Darashev

Cited concerning the admissibility of questions referred for a preliminary ruling and the circumstances in which a question may be declared inadmissible.