The Court of Justice of the European Union rules on the conditions for exemption from VAT on the supply of goods to another Member State

In its judgment C-676/22, the Court of Justice of the European Union (CJEU) has ruled on a preliminary ruling concerning the refusal by the domestic tax authorities to exempt supplies of goods to another Member State from value added tax.

In the present case, the Czech company supplied goods to another Member State, but the goods were not supplied to the persons named in the tax documents but to other recipients established in the Member State of supply. The subject-matter of the dispute was whether the supplier in the case described (while meeting the other conditions for exemption from VAT on the supply of goods to another Member State) was entitled to exemption from VAT.

On the question referred, the CJEU held, in its own rhetoric, that a supplier making a supply of goods to another Member State must be denied entitlement to exemption from VAT where that supplier has failed to prove that the goods were supplied to a recipient who is a taxable person in that other Member State and where, in the light of the facts and the information provided by the supplier, the information necessary to verify that that recipient had that status is not available. The CJEU has thus effectively followed up its decision in Kemwater ProChemie, which it transferred to entities in the position of the customer, and has thus opened up a new area for their assessment, namely through the lens of taxable status.

For more information and any questions, please contact the PKF APOGEO Tax team.