EGC VAT T-689/25 (James Howden and Co.) – Questions – VAT Exemption Conditions for IC Supplies and the Role of VAT Identification Numbers

1. Article 138: Exemption for the supply of goods dispatched or transported to a destination outside the Member State of supply, under certain conditions.
2. Article 193: Establishes the general rule that VAT is due when a taxable supply of goods or services is made.
3. Article 262: Obligation to submit a recapitulative statement for intra-Community supplies.
4. Article 264: Requirements for the information to be included in the recapitulative statement.
5. Article 203: Conditions under which VAT becomes chargeable.

Facts and Background

• The applicant, James Howden & Company Limited (“British Company”), a company from the United Kingdom (a non-Member Country for the purpose of the refund procedure), purchased goods from an Austrian supplier. These goods were dispatched from Austria to the British Company in Sweden. Critically, at the time of the supply, the British Company did not notify its Austrian supplier of a VAT identification number from a Member State other than Austria. The British Company also held neither a Swedish nor an Austrian VAT ID at that time (though it later provided an Irish VAT ID that was valid at the time of supply).
• Due to the absence of this VAT ID, the Austrian supplier charged Austrian VAT, rather than exempting the cross-border supply as an intra-Community transaction under Article 138(1)(b) of the VAT Directive. The British Company subsequently sought a refund of this Austrian input tax under the Eighth Council Directive (79/1072/EEC), which governs input tax refunds for traders in non-member countries.
• The Finanzamt Österreich (Austrian tax authorities) refused the refund, arguing that the supply could have been exempt and therefore Article 5 of the Eighth Directive, which excludes supplies that are or may be exempt, applied.
• Following this refusal, the British Company informed its Austrian supplier that it possessed an Irish VAT ID valid at the time of supply and requested the supplier to treat the transaction as VAT-free and correct the invoice. The supplier, however, refused to correct the invoice, believing that a later correction was inadmissible.
• The referring court emphasizes that there is no evidence of abuse or fraud in this case.

Questions

• Does the communication of a VAT identification number of a Member State other than the Member State in which the dispatch or transport of goods begins, in accordance with point (b) of Article 138(1) of Council Directive 2006/112/EC of 28 November 2006, as amended by Council Directive (EC) 2018/1910 of 4 December 2018 amending Directive 2006/112/EC as regards the harmonisation and simplification of certain rules in the value added tax system for the taxation of trade between Member States constitute a substantive condition for the exemption of an intra-Community supply, so that the supply is taxable in the absence of notification of such a VAT identification number?
• If the first question is answered in the affirmative and there is therefore a taxable intra-Community supply: Does that value added tax fall within the scope of Article 5 of the Eighth Council Directive 79/1072/EEC of 6 December 1979 and is there a right to deduct or a right to a refund of input tax in that regard?
• If the second question is answered in the affirmative, is it admissible to correct the initial invoice in the case of communication at a later stage of a VAT identification number already issued and valid at the time of the supply in a Member State other than that in which the dispatch or transport of the goods began, or does a deduction or refund of input tax by the recipient preclude a correction?
• If the third question is answered in the affirmative and a correction is admissible: Does such a correction have retroactive effect as of the point in time of the transaction (ex tunc correction) or only as of the point in time of the correction (ex nunc correction).

Source

• Curia

Other ECJ Cases Referred To

• C-587/10 (VSTR): Addressed the nature of the VAT identification number as a formal requirement rather than a substantive condition for exemption.
• C-628/16 (Kreuzmayr GmbH): Discussed the right to deduct input tax in relation to tax that is actually due.
• C-38/16 (Compass Contract Services): Explored the conditions under which input VAT deductions can be claimed.
• C-24/15 (Plöckl): Considered the conditions for VAT exemption and the requirements for intra-Community supplies.
• C-138/12 (Rusedespred): Examined provisions regarding the adjustment of improperly invoiced VAT.