Germany: Intra-Community Supply and Triangular Excise Transaction

• The General Court held that in a chain transaction with only one cross-border transport, the intra-Community transport can be attributed to only one supply; only that supply can qualify for the VAT exemption under Article 138(1) of the VAT Directive.
• A zero-rated intra-Community supply still requires transfer of the right to dispose of the goods as owner, proof of transport to another Member State, and actual physical departure from the Member State of dispatch.
• For excise goods supplied under duty suspension, the fact that the final customer in the destination Member State is liable for VAT does not by itself make the upstream supply from the first supplier to the intermediary exempt.
• The Court indicated that, because the intermediary had already resold the goods before dispatch and the first supplier knew of the onward sale, the transport had to be allocated by examining the overall circumstances, not automatically to the first supply.
• The triangular transaction simplification under Article 141 and the VAT liability transfer under Article 197(1) did not alter the basic test for whether the A-to-B supply was an exempt intra-Community supply.

Source: assets.kpmg.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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