Zero rate refused at car trade due to inadequate evidence

Zero rate refused at car trade due to inadequate evidence

• Ruling on Zero Rate Application: The Arnhem-Leeuwarden Court of Appeal ruled that X BV could not apply the zero VAT rate to intra-Community supplies of second-hand cars due to insufficient evidence of transport and receipt in another Member State.
• Lack of Supporting Documentation: X BV failed to provide necessary documentation, such as CMRs and order confirmations, and the collection declarations lacked essential details, including destination and registration numbers.
• Irregularities in Transactions: The court highlighted that X BV’s transactions raised concerns, including payments in cash and the lack of a verifiable customer relationship, as well as evidence indicating the cars did not reach Bulgaria but appeared in Germany instead. Consequently, X BV’s appeal was deemed unfounded.

Source Taxlive

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Court Ruling on Zero Rate Conditions for Second-Hand Car Sales and Fraud Penalties

• The court case involves the sale and purchase of second-hand cars and the conditions for applying a zero tax rate.
• The zero tax rate applies when goods are transported to another EU member state and taxed there, provided certain conditions are met.
• Exceptions to the zero tax rate include failure to meet formal conditions and involvement in VAT fraud.
• The seller must prove the goods were transported to another member state and received by a VAT-registered entity.
• The court found the seller did not sufficiently prove the cars were transported and received as required for the zero tax rate.

Source: uitspraken.rechtspraak.nl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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