(October 9, 2014)

On October 9, 2014 the European Court of Justice (ECJ) ruled in case C-492/13 Traum EOOD versus Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite (ECLI:EU:C:2014:2267).

The following questions were referred to the ECJ for a preliminary ruling: 

1. Is the requirement for entitlement to tax exemption under Article 138(1) of [the VAT] Directive ... fulfilled and is the exception under the second paragraph of Article 139(1) of the directive not applicable in circumstances such as those in the main proceedings, in which it was established that the person acquiring the goods was recorded as not having the status of a ‘person registered for VAT purposes’ in [the VIES database] after the actual supply had taken place, [or it is apparent from the information gathered by the Bulgarian tax authorities that the status of “person no longer registered for VAT purposes” was recorded belatedly] but the applicant claims that it acted with due diligence by carrying out searches for information in that database which are, however, not documented?
2. Are the principles of fiscal neutrality, proportionality and protection of legitimate expectations infringed by administrative practice and case-law under which it is for the vendor — the consignor under the transport contract — to establish whether the signature of the person acquiring the goods is authentic and whether it is the signature of a person representing the acquiring company, one of its employees in a corresponding position or an authorised person?
3. In a case such as that which gave rise to the main proceedings, does Article 138(1) of [the VAT] Directive ... have direct effect, and can the national court directly apply the provision?

The ECJ ruled as follows: 

1. Articles 138(1) and 139(1), second subparagraph, of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2010/88/EU of 7 December 2010, must be interpreted as precluding, in circumstances such as those in the main proceedings, the tax authorities of a Member State from refusing to grant an exemption from value added tax in respect of an intra-Community supply of goods on the ground that the purchaser was not registered for value added tax purposes in another Member State and the supplier has proven neither the authenticity of the signature on the documents submitted in support of its declaration in respect of a supply it claims to be exempt from value added tax nor that the person who signed those documents on behalf of the purchaser had the authority to represent the purchaser, where the evidence establishing entitlement to the exemption submitted by the supplier in support of its declaration is consistent with the list of documents to be submitted to those authorities under national law and has been accepted by them, initially, as supporting evidence, which is a matter for the referring court to verify.
2. Article 138(1) of Directive 2006/112, as amended by Directive 2010/88, must be interpreted as having direct effect, so that it may be relied upon by taxable persons before national courts against the State in order to obtain an exemption from value added tax in respect of an intra-Community supply of goods.

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