Comments on ECJ case C-234/24: Tooling Must Be Transported for VAT Exemption in Intra-EU Manufacturing Chains

• The ECJ ruled in Brose Prievidza (C-234/24) that tools not physically transported to another EU Member State cannot be zero-rated as ancillary to intra-Community supplies.
• For zero-rating under Article 138(1) of the VAT Directive, goods must be physically dispatched or transported to another Member State.
• The supply of the tool in Bulgaria was a separate, taxable supply and not eligible for zero-rating, even though it was used to produce zero-rated components.
• Economic linkage between the tool and the components is insufficient to treat them as a single composite supply for VAT purposes.
• The decision clarifies VAT treatment for businesses purchasing tools for use by subcontractors in other EU Member States.

Source: meridianglobalservices.com

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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