On 17 October 2019 the ECJ issued a judgment in a Polish case concerning the right to apply 0% VAT rate for export of goods if: (i) the goods have been exported to an unidentified recipient outside the EU, (ii) there is evidence that the goods have left the EU but (iii) the invoice indicates the wrong name of the recipient.
The ECJ ruled that:
- If it is proved that the goods have been sold and physically left the EU, then the export of goods took place, irrespective of the circumstances determining the actual purchaser of these goods. Nevertheless, the ECJ clearly indicated that there is no right to apply the 0% VAT rate if a tax fraud occurred, which the taxpayer knew about or should have known about.
- If the tax authorities prove that the export did not take place, they are not automatically entitled to classify such supply as a domestic one taxed with a 23% VAT rate. Such transaction should be considered as out of scope of VAT, which also means that the seller loses the right to deduct input VAT.
Please contact ASB Tax specialist if you have questions: