ECJ Case judgement gives clarity on the documentation required to VAT exemption on an intra-Community dispatch

Under the VAT exemption for intra-Community supplies, goods may be supplied between EU Member States without being subject to VAT in the Member State of departure, provided certain conditions are met. In practice, a common issue arises for companies when meeting the requirement to prove through documentary evidence that goods have actually been transported to another Member State. Without this, the supplier risks being assessed for VAT in the country from which the goods are dispatched.

The recent ECJ case involving Croatian company Flo Veneer (Case C-639/24) examines this exact problem and provides clarity on the role and limitations of the formal evidentiary rules laid down in EU VAT legislation.

Situation actuelle

The case arose from a dispute between Flo Veneer, and the Croatian tax authorities regarding supplies of goods made by Flo Veneer to its customer in another EU Member State. Although the Croatian tax authorities accepted that the goods were transported out of Croatia to another EU Member State, they denied the VAT exemption on the intra-Community dispatches on the grounds that Flo Veneer had not provided the specified documents listed in Article 45a of the VAT Implementing Regulation. This provision sets out certain transport documents which can be used to show that the goods have been transported to another Member State, such as a signed CMR or a bill of lading, for example. Flo Veneer had submitted other evidence, such as invoices, transport documentation and confirmations of receipt from the customer, but not the precise proof set out in Article 45a. As such, the Croatian tax authorities did not see the conditions for the exemption as having been met. The case was passed on to the Croatian national court, which in turn asked the ECJ to determine whether the exemption could be refused solely for that reason.

Outcome of the Case

In its judgment, the ECJ held that Article 45a of the VAT Implementing Regulation does not impose a mandatory or exhaustive list of requirements. The Court ruled that, where the documents specified in the provision are submitted, it is to be presumed in favour of the taxpayer that the conditions for the VAT exemption have been satisfied. More importantly however, it was determined that the absence of those specified documents does not, by itself, justify refusing the VAT exemption.

Where the tax authorities are satisfied, based on all the evidence available, that the goods have actually been transported to another Member State, the material conditions for the exemption under Article 138 of the VAT Directive are met, and the exemption must be granted. The ECJ reaffirmed that VAT exemptions cannot be denied solely on the basis of formal shortcomings where the fundamental requirements have been fulfilled.

 Implications for Businesses

For businesses making intra-Community supplies, the Flo Veneer judgment provides welcome clarification to this important and sometimes difficult area of VAT. While the evidence requirements detailed in Article 45a remain a useful way to demonstrate that the goods have been transported, it is not the only way to prove that an intra-Community supply has taken place. Companies that are unable to produce the exact documentation listed in that provision can still rely on other credible evidence to prove cross-border transport. At the same time, the decision highlights the importance of maintaining comprehensive and consistent documentation, as tax authorities are entitled to assess all the facts and evidence on a case-by-case basis.

This ruling serves to reduce the risk of legitimate intra-Community supplies being denied a VAT exemption simply because of a strict application of the documentation requirements.

If your company is involved in making intra-Community dispatches within the EU, and would like support with identifying and maintaining sufficient documentation to allow the VAT exemption, please feel free to reach out to us and one of our VAT experts will be happy to assist you.