Interim use of horse does not preclude the application of zero rate for export

Background and Facts: X BV sold a competition showjumping horse to a US riding school applying the zero VAT export rate; prior to final export in November 2016, the horse remained in the EU to compete and test rider suitability under a conditional sales agreement.
The Core Dispute: The tax dispute centered on whether this interim use—specifically, the buyer entering the horse into EU competitions before export—prevented the transaction from qualifying for the zero VAT rate.
The Court’s Decision: The Court of Appeal of ‘s-Hertogenbosch ruled in favor of X BV, deciding that customary interim use to maintain a competition horse’s condition (including competing) does not preclude the export zero rate, provided there is no evidence of fraud or tax abuse.

Background and Facts: Dutch horse dealer A BV sold a showjumping horse to a US buyer for €350,000 applying the zero VAT export rate; before the physical export to the US in November 2016, the buyer’s son competed with the horse in eight EU events to test their compatibility.
The Tax Authority’s Challenge: The Dutch Tax Administration issued an additional VAT assessment of €60,743 plus interest and penalties, arguing that the interim use and time lapse broke the direct link between the supply and the export, disqualifying the transaction from the zero rate.
The Court’s Ruling: The Court of Appeal of ‘s-Hertogenbosch annulled the assessment, ruling (citing CJEU case BDV Hungary Trading, C-563/12) that a delay and customary interim use necessary to keep a competition horse in condition do not preclude the export zero rate, provided there is no fraud or tax abuse.