THE INTRA-EU SUPPLIES IN

THE ECJ CASE-LAW ON VAT

Francisco Javier Sánchez Gallardo
 • General comments on the intra-EU exchanges
VAT regime
• Material requirements for exemption
• Transmission and departure of the goods
• Status and identification of the recipient

• Actions of the tax authorities

INDEX • Other issues
• The theory of knowledge and the intra-EU supplies of
goods
• Chain supplies
• Independence of taxation in different States
• Compatibility with other exemption cases
• Triangular transactions
• Importations followed by intra-EU supplies
GENERAL COMMENTS ON THE INTRA-EU
EXCHANGES VAT REGIME (I)

EMAG, C-245/04:
The special arrangements for the taxation of trade between Member States resulted in the abolition of fiscal
frontiers.
Having verified that the conditions which would have made it possible to establish the principle of taxation in the
Member State of origin were not met on that date without affecting, for EU traffic between taxable persons, the
principle of attribution of tax revenue corresponding to the application of VAT at the final stage to the consumption
Member State, the EU legislator established a transitional system of taxation of trade between Member States
based on the establishment of a new taxable event, namely, the intra-EU acquisition of goods.
Under the transitional regime, the seller, on the one hand, makes an exempt delivery in the origin Member State
and, on the other hand, obtains from the aforementioned State the deduction and refund of the borne VAT. As for
the purchaser, it carries out an intra-EU acquisition VAT taxed in the destination Member State. This mechanism
allows the tax revenue to be transferred to the Member State in which the final consumption takes place.
GENERAL COMMENTS ON THE INTRA-EU
EXCHANGES VAT REGIME (II)

Teleos and others, C-409/04:

The objective pursued by the transitional regime established for intra-
EU trade is the transfer of tax revenue to the consumption Member
State, which was created to regulate intra-EU movement of goods.
Having replaced the system of imports and exports between the
Member States, this regime is clearly distinguished from that regulating
the operations carried out internally in the country. The precondition for
the application of such a regime is the intra-EU nature of an operation
and, in particular, a physical movement of goods from one Member
State to another.
GENERAL COMMENTS ON THE INTRA-EU
EXCHANGES VAT REGIME (III)

X, C-84/09:
The transitional VAT regime for the intra-EU trade is based on the establishment of a new
taxable event, namely, the intra-EU acquisition of goods, which allows the tax income to be
transferred to the Member State in which the final consumption takes place.
The mechanism consisting, on the one hand, of the exemption, by the departure Member State,
of the delivery giving rise to the intra-EU transport, accompanied by the right to the deduction
or refund of the VAT paid into that Member State, and, on the other hand, in the taxation
required by the destination Member State, was intended to settle a clear delimitation of the
fiscal sovereignty of the Member States.
In this regard, this judgment is identical to that of 14-6-2017, Santogal M-Comércio e
Reparação de Automóveis, C-26/16.
EXEMPTION REQUIREMENTS. TRANSMISSION
AND DEPARTURE OF THE GOODS (I)

Teleos and others, C-409/04:

The taxation of intra-EU acquisitions of goods and the
exemption for the intra-EU deliveries established in the VAT
Directive only apply if the goods have been transferred to
the purchaser as the owner and, on the occasion of delivery,
have physically left the State of delivery to another Member
State of the EU.
EXEMPTION REQUIREMENTS. TRANSMISSION
AND DEPARTURE OF THE GOODS (II)

X, C-84/09:
In order to qualify a delivery of goods as intra-EU there must be
some type of link with the transport of the goods, but it cannot
be related to a specific time frame within which the transport must
begin or end. To do this, an overall assessment of all the
objective circumstances and the intent of the purchaser must be
made, provided that it can be deduced from objective elements
that allow identification of the State in which the final use of the
corresponding good is expected to take place.
EXEMPTION REQUIREMENTS. TRANSMISSION
AND DEPARTURE OF THE GOODS (III)

Plöckl, C-24/15:
The VAT Directive precludes the tax authorities of the origin
Member State from refusing to exempt an intra-EU transfer of
goods claiming that the taxpayer has not communicated the VAT
Number assigned by the destination Member State when there is
no serious indication to suggest the existence of fraud, the goods
have been transferred to another Member State and the other
requirements for the exemption are fulfilled.
EXEMPTION REQUIREMENTS. TRANSMISSION
AND DEPARTURE OF THE GOODS (IV)

Toridas, C-386/16:
For the intra-EU deliveries exemption, processing or
transforming of the goods, in the course of a supply chain,
carried out on the instructions of the intermediary acquiring
the goods and before the goods are transported to the
Member State of the final acquiror, has no effect where that
processing takes place after the first supply.
EXEMPTION REQUIREMENTS. STATUS AND
IDENTIFICATION OF THE RECIPIENT (I)

R., C-285/09:
In the case of intra-EU supplies in which the identity of the
real purchaser of the goods is concealed within the
framework of a carousel fraud scheme, the origin Member
State may deny the exemption.
EXEMPTION REQUIREMENTS. STATUS AND
IDENTIFICATION OF THE RECIPIENT (II)

VSTR, C-587/10:
The exemption of the intra-EU supplies of goods is subordinated to the
condition of taxable person of the acquirer, which is usually demonstrated
by means of its VAT number, but this does not prevent its accreditation by
other means.
The denial of the exemption cannot be justified by the fact that this obligation
has not been fulfilled when the supplier cannot, in good faith, and after having
taken all the measures that can be reasonably required, provide such VAT
number and provides, on the other hand, indications that serve to
demonstrate sufficiently that the acquirer is a taxpayer who acts as such in the
operation in question.
EXEMPTION REQUIREMENTS. STATUS AND
IDENTIFICATION OF THE RECIPIENT (III)

Traum, C-492/13:
The VAT Directive, together with the principle of legal certainty, preclude the tax authorities
from refusing the exemption in respect of an intra-EU supply of goods on the ground that the
purchaser was not registered for VAT purposes in another Member State and the supplier has
proven neither the authenticity of the signature on the documents submitted in support of its
declaration nor that the person who signed those documents on behalf of the purchaser had
the authority to represent him, where the evidence submitted in support of the declaration is
consistent with the list of documents to be submitted to those authorities under national law
and has been accepted by them, initially, as supporting evidence.
The art.138 of the VAT Directive, establishing the exemption of the intra-EU supplies has direct
effect, so that it may be relied upon by taxable persons before national courts against the State
in order to obtain an exemption from value added tax in respect of an intra-EU supply of goods.
EXEMPTION REQUIREMENTS. STATUS AND
IDENTIFICATION OF THE RECIPIENT (IV)

Plöckl, C-24/15:
The VAT Directive precludes the tax authorities of the origin
Member State from refusing to exempt an intra-EU transfer of
goods claiming that the taxpayer has not communicated the VAT
Number assigned by the Member State of destination when there
is no serious indication to suggest the existence of fraud, the
goods have been transferred to another Member State and the
other requirements for the exemption are fulfilled.
EXEMPTION REQUIREMENTS. STATUS AND
IDENTIFICATION OF THE RECIPIENT (V)

Euro Tyre Holding, C-21/16:

The VAT Directive precludes the tax authorities from refusing to exempt an intra-EU supply for
the sole reason that, at the time of delivery, the purchaser, domiciled in the territory of the
destination Member State and holder of a VAT Number valid for transactions in that State, is not
registered in the VAT information exchange system (VIES) and is not subject to a system of
taxation of intra-EU acquisitions, even when there is no serious indication of fraud and it has
been proven that the material requirements for exemption are met.
In this case, the art.138 of the VAT Directive, interpreted in light of the principle of
proportionality, also precludes the denial of the exemption in the event that the seller knows
the circumstances that characterize the situation of the purchaser and has the expectation that,
at a later time, this one will obtain registration as an intra-EU operator with retroactive effects.
EXEMPTION REQUIREMENTS. STATUS AND
IDENTIFICATION OF THE RECIPIENT (VI)

Santogal M-Comércio e Reparação de Automóveis, C-

26/16:
The VAT Directive precludes a national provision from making
the recognition of the exemption of intra-EU supply of a new
means of transport subject to the requirement that the
purchaser be established or domiciled in the destination
Member State of that means of transport.
ACTIONS OF THE TAX AUTHORITIES (I)

Teleos and others, C-409/04:

The tax authorities cannot refuse the exemption of intra-EU supplies of goods applied
by an operator who acted in good faith, with support in documentary evidence that at
first sight justifies their right to the exemption but which prove to be false, without
having demonstrated that said operator participated in a fraud scheme, provided that
the latter would have taken all reasonable measures at his disposal to ensure that such
participation did not exist.
The submission of a VAT declaration in the destination Member State of the
merchandise including the intra-EU acquisitions of the same may be an evidence to be
considered to prove that the goods have left the country of origin, but it does not
constitute conclusive proof for the purposes of the exemption of intra-EU supply.
ACTIONS OF THE TAX AUTHORITIES (II)

Collée, C-146/05:
The exemption of intra-EU supplies cannot be denied as a
consequence of the fact that the proof of the accomplishment of
the aforementioned delivery is not provided in due course.
The circumstance that the taxpayer who has made an intra-EU
supply has consciously concealed its realization at first is only
relevant in the event that the taxpayer has not completely
eliminated the risk of tax loss and that risk actually exists.
ACTIONS OF THE TAX AUTHORITIES (III)

Twoh International, C-184/05:

Neither the VAT Directive nor the EU rules on administrative
cooperation imply that, in the framework of an intra-EU
supply whose exemption is disputed, the authorities of the
Member States are obliged to request information from the
State of destination indicated by the supplier.
ACTIONS OF THE TAX AUTHORITIES (IV)

R., C-285/09:
In the case of intra-EU supplies in which the identity of the
real purchaser of the goods is concealed within the
framework of a carousel fraud scheme, the origin Member
State may deny the exemption.
ACTIONS OF THE TAX AUTHORITIES (V)

Mecsek-Gabona Kft, C-273/11:

The VAT Directive does not preclude the seller from being denied the
exemption from intra-EU delivery, provided that it is objectively proved that
has failed to comply with its obligations, provided that it has been established,
on the basis of objective evidence, that knew or should have known that the
transaction it carried out was involved in a fraud committed by the purchaser
and that it did not take all reasonable measures within its reach to prevent its
own participation in the fraud.
The exemption of an intra-EU supply cannot be denied due to the fact that the
recipient has been retroactively withdrawn, by its tax authorities, its VAT
identification number.
ACTIONS OF THE TAX AUTHORITIES (VI)

Enteco Baltic, C-108/17:

The VAT Directive precludes an administrative practice under which an importer acting in good
faith is refused the right to the exemption settled for imports followed by intra-EU supplies
where the conditions for this are not satisfied, because of tax evasion on the part of the
purchaser, unless it is shown that the importer knew or ought to have known that the
transaction was involved in tax evasion committed by the purchaser and did not take all
reasonable steps in his power to avoid participation in the evasion.
The mere fact that the importer and the purchaser communicated by electronic means of
communication cannot allow it to be presumed that the importer knew or could have known
that he was participating in tax evasion.
According to the VAT Directive, the competent national authorities are not obliged, when
examining the transfer of the power to dispose of goods as owner, to collect information to
which only the public authorities have access.
OTHER ISSUES. THE THEORY OF
KNOWLEDGE (I)

Mecsek-Gabona, C-273/11:
The VAT Directive does not preclude the seller from being denied
the exemption from intra-EU delivery, provided that it is
objectively proved that has failed to comply with its obligations
with respect to evidence or knew or should have known that the
transaction it carried out was involved in a fraud committed by the
purchaser and that it did not take all reasonable measures within
its reach to prevent its own participation in the fraud.
OTHER ISSUES. THE THEORY OF
KNOWLEDGE (II)

Santogal M-Comércio e Reparação de Automóveis, C-26/16:

The VAT Directive, together with the principles of legal certainty,
proportionality and protection of legitimate expectations preclude that the
seller of a new means of transport, transported by the purchaser to another
Member State and registered in this State on a temporary basis, is
subsequently forced to pay VAT in case of tax fraud committed by the
purchaser, unless it is demonstrated, on the basis of objective data, that the
aforementioned seller knew or should have known that the operation was
involved in a fraud committed by the purchaser and did not take all
reasonable measures at its disposal to prevent its participation in that fraud.
OTHER ISSUES. CHAIN SUPPLIES (I)

EMAG, C-245/04:
In intra-EU chain operations in which there are two deliveries and
a single transport, said transport can only be linked to one of
these deliveries, which will be the exempt supply and will result in
the intra-EU acquisition in the State of destination of the goods.
The foregoing interpretation is valid regardless of which of the
operators involved in the transactions has the right to dispose of
the goods during their shipment or transport.
OTHER ISSUES. CHAIN SUPPLIES (II)

Euro Tyre Holding, C-430/09:

When two chain supplies occur, the first one can be considered as intra-EU supply if
the intention of the purchaser, confirmed by objective elements, allows concluding
that the goods will leave the State of origin. To do this, an overall assessment of all
the particular circumstances must be carried out in order to determine which of these
two deliveries meets all the requirements corresponding to an intra-EU supply.
However, if the first person acquiring the goods, having obtained the right to dispose
of them in the Member State of the first supply, expresses his intention to transport
them to another Member State and presents a VAT number attributed by that other
State, the intra-EU transport should be ascribed to the first supply, on condition that
the right to dispose of the goods as owner has been transferred to the second person
acquiring the goods in the destination Member State.
OTHER ISSUES. CHAIN SUPPLIES (III)

VSTR, C-587/10:
In intra-EU chain operations where there is only one
transport, only the one to which the transport can be
attributed can be considered as intra-EU.
OTHER ISSUES. CHAIN SUPPLIES (IV)

Toridas, C-386/16:
A supply of goods by a taxable person established in a first Member State is not exempt where,
prior to entering into that supply transaction, the person acquiring the goods, who is identified
for VAT purposes in a second Member State, informs the supplier that the goods will be resold
immediately to a taxable person established in a third Member State, before he takes them
out of the first Member State and transports them to that third taxable person, provided that
that second supply has in fact been carried out and the goods have then been transported from
the first Member State to the Member State of the third taxable person.
The fact that the first person acquiring the goods is identified for VAT purposes in a Member
State other than that of the place of the first supply or that of the place of the final acquisition is
not a criterion for classification of an intra-EU transaction or, in itself, evidence sufficient to show
that a transaction is an intra-EU one.
OTHER ISSUES. CHAIN SUPPLIES (V)

AREX CZ, C-414/17:

In the context of chain transactions with a single transport, in order to determine to which of the
transactions the intra-EU transport must be related and which must, therefore, be classified as
an intra-EU acquisition, it is for the referring court to carry out an overall assessment of all the
specific circumstances of the individual case and to determine, in particular, when the transfer to
Arex of the right to dispose of the goods as an owner occurred.
In the event that the transfer took place before the intra-EU transport started, said transport
must be related to the acquisition by Arex and that acquisition must therefore be classified as an
intra-EU acquisition.
The fact that the fuel transport at issue in the main proceedings was carried out under an excise
duty special regime is not, however, a decisive factor in determining to which of the acquisitions
of the chain at issue in the main proceedings that transport must be ascribed.
OTHER ISSUES. INDEPENDENCE OF TAXATION IN
DIFFERENT STATES (I)

Transport Service, C-395/02:

A delivery that is treated as an intra-EU exempt supply, but it does not meet
the requirements for the exemption, and to which no other exemption is
applicable, it is a delivery subject and not exempt from VAT. In case the
operation has been considered as exempt, the corresponding State may
proceed to the VAT collection without the principle of neutrality precluding it.
The fact that at the end of a distribution chain the corresponding VAT has
been paid does not exempt from the payment of VAT that is applicable for the
previous operations of the chain (this is a CJEU order, not a judgment).
OTHER ISSUES. INDEPENDENCE OF TAXATION IN
DIFFERENT STATES (II)

Teleos and others, C-409/04:

The tax authorities cannot refuse the exemption of intra-EU supplies of goods applied
by an operator who acted in good faith, with support in documentary evidence that at
first sight justifies their right to the exemption but which prove to be false, without
having demonstrated that said operator participated in a fraud scheme, provided that
the latter would have taken all reasonable measures at his disposal to ensure that
such participation did not exist.
The submission of a VAT declaration in the destination Member State including
the intra-EU acquisitions may be an evidence to be taken into account to prove that
the goods have left the country of origin, but it does not constitute conclusive proof
for the purposes of the exemption of intra-EU supply.
OTHER ISSUES. INDEPENDENCE OF TAXATION IN
DIFFERENT STATES (III)

Santogal M-Comércio e Reparação de Automóveis, C-26/16:

The exemption of a delivery of a new means of transport cannot be
refused in the origin Member State for the sole reason that such means
of transport have been granted only of a temporary registration in the
destination Member State, being the seller of a new means of
transport, transported to another Member State by the purchaser and
registered in this State on a temporary basis, required to pay VAT at a
later stage when it is not established that the temporary registration
regime has ended and VAT has or will be paid in the Member State of
destination.
OTHER ISSUES. COMPATIBILITY WITH OTHER
EXEMPTION CASES

Eurodental, C-240/05:
The exemption of the supplies carried out by dental
technicians prevails over the exemption of intra-EU
deliveries. Consequently, a dental technician who makes
intra-EU supplies cannot deduct the input VAT corresponding
to the manufacture of dental prosthesis, even if its delivery is
an intra-EU transaction and irrespective of the VAT regime
applicable in the Member State of destination.
OTHER ISSUES. TRIANGULAR TRANSACTIONS (I)

Firma Hans Bühler, C-580/16:

The requirement laid down for the exemption of the intra-EU acquisitions
corresponding to the triangular transactions can be considered met where the taxable
person is resident and identified for VAT purposes in the Member State from which the
goods are dispatched or transported, but that that taxable person uses the VAT
identification number of another Member State for that specific intra-EU
acquisition.
The VAT Directive precludes the tax authorities of a Member State from applying that
exemption solely on the ground that, in the context of an intra-EU acquisition, made
for the purposes of a subsequent supply in the territory of a Member State, the
recapitulative declaration for the intra-EU transactions was not submitted in good
time by the taxable person identified for VAT purposes in that Member State.
OTHER ISSUES. IMPORTATIONS FOLLOWED BY
INTRA-EU SUPPLIES (I)

Enteco Baltic, C-108/17:

The VAT Directive precludes the tax authorities from refusing the exemption of on importation on the sole ground that, following a change of circumstances
after the importation, the concerned goods have been supplied to a taxable person other than the person whose VAT number was stated in the import
declaration, where the importer has communicated all the information on the identity of the new purchaser to the competent authorities, provided that it is
shown that the substantive conditions for the exemption of the subsequent intra-EU supply are actually satisfied. To this effect:
- documents which confirm the transport of goods from a tax warehouse in the Member State of import, not to the purchaser but to a tax warehouse in
another Member State, may be regarded as sufficient evidence of dispatch or transport of the goods to another Member State;
- documents such as consignment notes on the basis of the Convention on the Contract for the International Carriage of Goods by Road, and electronic
administrative documents accompanying movements under suspension of excise duty may be taken into account to show that, at th e time of importation,
the goods concerned are intended to be dispatched or transported to another Member State, provided that the documents are submitted at that time
and include all the necessary information. Those documents, as also the electronic confirmations of the supply of the goods and the report of receipt
issued following a movement under suspension of excise duty, are capable of showing that the goods have actually been dispatched or transported to
another Member State.
The VAT Directive precludes the tax authorities from refusing the exemption for imports of goods followed by intra-EU supplies on the ground that the
goods were not transferred directly to the purchaser but were handled by transport companies and tax warehouses designated by the purchaser, where
the power to dispose of the goods as owner was transferred to the purchaser by the importer.
OTHER ISSUES. IMPORTATIONS FOLLOWED BY
INTRA-EU SUPPLIES (II)

Božičevič Ježovnik, C-528/17:

The exemption from import VAT in a case of an importation followed by an intra-EU supply is
conditional upon the importer subsequently making an exempt intra-EU supply under. Both
transactions must be treated consistently so as to ensure the inherent logic of the import
exemption scheme.
The principle of legal certainty precludes a Member State which has initially accepted the
documents submitted by the vendor as evidence establishing entitlement to an exemption for a
supply from subsequently requiring that vendor to account for the VAT on that supply, because
of fraud by the customer of which the vendor had and could have had no knowledge.
The application of the above is limited to situations where the taxable person acted in good
faith and took every step which could reasonably be asked of him to avoid any participation in
tax evasion, which is for the national court to determine based on an overall assessment of the
circumstances.
ADDITIONAL INFORMATION

Additional information about some of those topics can be

found in the book "ECJ case-law on VAT", available
electronically and whose link is attached:
https://www.efl.es/catalogo/manuales-juridicos/ecj-case-law-
on-vat