Dutch Court of Appeal: Temporary Use Does Not Necessarily Prevent Zero-Rated VAT on an Export

Businesses exporting goods outside the EU may qualify for zero-rated VAT. However, uncertainty can arise when goods remain within the EU or are used by the purchaser before export, posing the risk to businesses of potential unexpected VAT liabilities where VAT suddenly becomes due on an export which was previously expected to be zero-rated.

In a judgment from the 16th of September 2026 (Case No. 24/936), the Dutch Court of Appeal considered the zero-rated VAT treatment applied to the sale of a show-jumping horse by a Dutch company to a US customer for €350,000. Although the sale took place in July 2016, the horse remained in Europe and participated in competitions, before ultimately being exported to the US in November 2016.

The Dutch tax authorities challenged this zero-rated export, arguing that the time delay and the horse’s participation in competitions broke the connection between the sale and the export. As such, applying a zero-rated VAT treatment was incorrect, and instead, the asserted that Dutch VAT should be due on this sale. The initial court ruled in favour of the Dutch tax authorities, but the Court of Appeal ultimately found in favour of the seller and upheld the zero-rated VAT treatment of this export.

A Practical Approach

 The Court held that the delay and temporary use of the horse within the EU did not prevent the application of the zero-rated VAT treatment on the export. The horse was ultimately exported as agreed between the parties, its participation in competitions was consistent with its intended purpose, and there was no evidence of VAT fraud.

The judgment illustrates that a delay between sale and export does not automatically in itself disqualify a transaction from a zero-rated VAT treatment. This may be highly relevant, and reassuring, to businesses whose goods require testing, preparation, demonstrations or other temporary use before export.

However, it is important to note that this Dutch decision does not provide a blanket exemption for delayed exports across the EU. For example, in some EU Member States there is a general 3-month time limit between the sale and the physical export, and anything exceeding 3 months may remove the possibility of applying a zero-rated VAT treatment to the export. The outcome ultimately depends on the circumstances of each individual transaction and local requirements, and as such, each export should be assessed on a case-by-case basis.

How can a Business support Zero-Rated Exports?

In order to support zero-rated exports, and prevent potential unforeseen VAT liabilities, a business should carefully:

• Document the export agreement between the parties: Clearly establishing that the goods are intended for export outside the EU.
• Retain Export Documentation: Keep sufficient documentary evidence, such as customs declarations and proof of transport, which evidences the fact that the goods left the EU.
• Assess National Requirements: Review any applicable national rules or requirements in the Member State of dispatch to ensure the transactions complies with the requirements to be zero-rated. Ideally, this would be complete in advance of any exports occurring.
• Consult with VAT Specialists: It may be worth seeking advice from VAT specialists to ensure the correct VAT treatment is applied, national rules are complied with, sufficient documentary evidence is retained, and no unforeseen VAT liabilities are imposed.

Here at Meridian, we have extensive experience in advising businesses on all areas of VAT, including zero-rated exports. If you have any VAT related questions, or require any support, please feel free to reach out and we would be delighted to help!