VAT News

ECJ Case-Zero rated intra-community supplies

In a recent case, the European Court of Justice has found in favour of a Portuguese taxpayer (Euro Tyre, a Portuguese branch of a Dutch entity) who zero rated supplies of goods dispatched from Portugal to a seperate legal entity established in Spain.

Euro Tyre had made the dispatch of goods directly to the customer in Spain, and had displayed the customer's ES VAT number upon the invoice, whilst also retaining evidence of the transport of the goods. This in itself is generally regarded as sufficient evidence to make the supply free of VAT in the EU member state of dispatch.

However, the Portuguese tax authorities undertook an audit and made an assessment for Portuguese VAT on the basis that the ES VAT number of the customer was not registered on the EU VIES system. This system lists the EU VAT numbers of businesses who trade cross-border within the EU. As the customer had not previously traded this way, it was only registered on the domestic Spanish system, and not VIES.

Euro Tyre appealed this assessment on the basis that the substantive requirements for making the intra-community dispatch free of VAT were met, and the ECJ agreed with them.

Whilst this case had a positive outcome for the taxpayer, it is advisable for businesses to check their customer's VAT number using the VIES system.

Related articles

HMRC: No VAT on e-Publications for UK Citizens as of 1 May 2020

HMRC has scrapped VAT completely off e-books and e-publications from 20% down to 0%. In an effort to make reading more accessible for the UK public while in self-isolation due to the Coronavirus, HMRC fast-tracked the motion and implemented it seven months ahead of schedule. 

Read more
COVID-19 VAT tips for businesses

These COVID-19 VAT tips for businesses will help companies around the world boost liquidity in times of economic challenges. Learn how to harness VAT refunds and compliance.

Read more
COVID-19 VAT Cashflow Tips (Part Two)

COVID-19 is affecting business in ways no one thought possible. In order to free yourself from the burden of cashflow worry, we’re trying to do our bit to advice you on ways you can inject income into your bottom line.

Read more