Opinion Statement FC 4/2024 on Evidence to Support Transport Organised by the Customer Under Article 138 of the VAT Directive

CFE Tax Advisers Europe has issued an Opinion Statement on evidence to support transport organised by the customer under Article 138 of the VAT Directive, specifically, on the term “the Supplied Goods Dispatched or Transported to a Destination Outside the Respective Territory but within the Community, by or on behalf of vendor or the Person Acquiring the Goods” for the Purpose of Article 138(1) of the VAT Directive.

Article 138 of the Principal VAT Directive exempts the supply of goods dispatched or transported to a destination outside a respective territory but within the Community, by or on behalf of the vendor or the person acquiring the goods, for another taxable person, or for a non-taxable legal person acting as such in a Member State other than that in which dispatch or transport of the goods began.

It is important to note that this requires proof of two issues. The first is proof of the transport of the goods and the second is proof of on whose behalf the transport has been organised. It is generally relatively easy for a supplier who organises for the goods to be transported to a different Member State to prove that fact. However, the exemption also extends to cases where the goods are dispatched or transported to a different Member State by or on behalf of the person acquiring the goods. Particularly when there are chain transactions, in these circumstances there is no clear and comprehensive guidance as to how a vendor is to establish his entitlement to exempt the supply and in practice it can be very difficult to establish what evidence is required.

We consider that it is unfortunate that no steps have so far been taken to provide guidance or clarification on this important issue. Given these difficulties we consider that it would be highly desirable to produce clear and transparent rules and guidance for suppliers in order:

  • to secure greater legal certainty;
  • avoid unduly complicating intra-EU trade in goods;
  • to fight against VAT fraud.

In order to secure the unified cross-EU interpretation:

  • the term “the transport on behalf” should be more clearly defined in either the part of the VAT Directive or the Implementing Regulation;
  • the list of the potential evidence to provide to prove the term “the transport on behalf” should also be defined in the Implementing Regulation.

Please read our Opinion Statement for further comments on this issue. CFE hopes that the comments are of assistance and stand ready to assist the Commission in considering the issues raised above in our Statement in the course of policy dialogue.