ECJ Clarifies VAT Exemption Rules for EU Exports
The European Court of Justice (ECJ) has clarified rules for Value Added Tax (VAT) exemption on goods exported outside the EU. In a recent ruling, the ECJ stated that the supplier's knowledge or intent regarding the final destination of goods is not a determining factor for VAT exemption.
The case involved a Polish company supplying goods to a VAT-registered business in Latvia. The goods were initially declared as an intra-Community supply, intended for movement within the EU. However, the Latvian company then exported the goods to Belarus, outside the EU.
The ECJ ruled that Directive 2006/112/EC allows VAT exemption for such exports, provided certain conditions are met. The court emphasized that export evidence takes precedence over the originally declared intra-EU movement. This means that even if goods are initially declared as an intra-Community supply, they can still qualify for VAT exemption if they are subsequently exported outside the EU. Valid customs documentation supporting the export is required to prove this.
The ECJ's ruling provides clarity on VAT exemption rules for goods exported outside the EU. It confirms that the supplier's intent or knowledge of the final destination is not a deciding factor. Instead, the focus is on the actual export and the availability of appropriate customs documentation.
