On October 20, 2016 the Court of Justice of the European Union (CJEU) judged in Case C-24/15, Josef Plöckl versus Finanzamt Schrobenhausen (ECLI:EU:C:2016:791).
Do Article 22(8) of the Sixth Directive, in the version resulting from Article 28h thereof, and the first subparagraph of Article 28c(A)(a) and Article 28c(A)(d) of the Sixth Directive permit Member States to refuse to grant a tax exemption in respect of an intra-Community supply (in this instance, an intra-Community transfer) where, although the supplier has not taken all the measures that can reasonably be expected of him from the point of view of the formal requirements applicable to the recording of the VAT identification number, there is no specific evidence of tax evasion, the goods have been moved to another Member State and the other conditions of exemption from tax are also met?
The dispute in the main proceedings and the question referred for a preliminary ruling
· In 2006, Mr Plöckl, a sole trader, acquired a vehicle which he assigned to his undertaking. On 20 October 2006, he dispatched the vehicle to a dealer established in Spain with a view to selling it in Spain. That dispatch was evidenced by a CMR consignment note (dispatch note drawn up on the basis of the Convention on the Contract for the International Carriage of Goods by Road, signed in Geneva on 19 May 1956, as amended by the Protocol of 5 July 1978). On 11 July 2007, the vehicle was sold to an undertaking established in Spain.
· Mr Plöckl did not declare any turnover in respect of that transaction for 2006. For 2007, he declared a VAT-exempt intra-Community supply to that undertaking.
· In the context of an external audit, the Tax Office took the view that the conditions applicable to an intra-Community supply were not satisfied and that the transaction was a supply which was required to be taxed in Germany in respect of the year 2007. It therefore issued a VAT amendment notice for 2007.
· During the subsequent proceedings before the Finanzgericht München (Finance Court, Munich, Germany), that court established that the vehicle at issue in the main proceedings was already in Spain in 2007, which led the Tax Office to annul that amendment notice.
· Following that annulment, the Tax Office corrected the VAT calculation for 2006, taking the view that the transfer of the vehicle to Spain in 2006 was subject to VAT and was not exempt, since Mr Plöckl had not provided a VAT identification number issued by Spain and had not, therefore, produced the accounting evidence required for the purposes of exemption from VAT.
· Mr Plöckl brought an action against that decision before the referring court. That court is of the view, first, that there was no intra-Community supply owing to the absence of a sufficient temporal and material link between the dispatch of the vehicle to Spain and its sale in Spain and, secondly, that the intra-Community transfer effected in 2006 is subject to VAT under Paragraph 3(1a) of the UStG.
· However, the referring court wonders whether that transfer should be exempt from VAT. It notes that, while Mr Plöckl did not take all reasonable measures to provide a VAT identification number issued by the Member State of destination, there is no specific evidence of tax evasion and the Tax Office rules out any such evasion. According to the referring court, Mr Plöckl simply made an error of law in recording the transfer and subsequent sale as an intra-Community supply and did not make a false statement to the Tax Office.
· In that respect, the referring court refers to paragraph 58 of the judgment of 27 September 2012, VSTR (C‑587/10, EU:C:2012:592), from which it follows that the exemption from VAT of an intra-Community supply may be made subject to the provision by the supplier of the VAT identification number of the person acquiring the goods, with the proviso that the grant of that exemption should not be refused on the sole ground that that requirement was not fulfilled where the supplier, acting in good faith and having taken all the measures which can reasonably be required of him, is unable to provide that identification number but provides other information which is such as to demonstrate sufficiently that the person acquiring the goods is a taxable person acting as such in the transaction at issue.
· The referring court considers that the Court’s reasoning in that judgment is also applicable to an intra-Community transfer, such as that at issue in the main proceedings, and that it can be inferred from it that, in the present case, exemption from VAT may be refused on the ground that Mr Plöckl did not take all reasonable measures to provide a VAT identification number issued by the Member State of destination.
· However, the referring court notes that, in paragraph 52 of that judgment, the Court held that it is legitimate to require that a supplier act in good faith and take every measure which can reasonably be required of him to ensure that the transaction that he effects does not lead to his participation in tax evasion. It is therefore of the view that a taxable person cannot be required to take reasonable measures unless there is specific evidence of tax evasion.
· In the absence of specific evidence of tax evasion, the referring court considers that exemption from VAT cannot be refused where the substantive conditions for such exemption are met, as they are in the case before it, the production of a VAT identification number not constituting such a condition. In those circumstances, such a refusal would be contrary to the principles of fiscal neutrality and proportionality.
· The Finanzgericht München (Finance Court, Munich) therefore decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:
‘Do Article 22(8) of the Sixth Directive, in the version resulting from Article 28h thereof, and the first subparagraph of Article 28c(A)(a) and Article 28c(A)(d) of the Sixth Directive permit Member States to refuse to grant a tax exemption in respect of an intra-Community supply (in this instance, an intra-Community transfer) where, although the supplier has not taken all the measures that can reasonably be expected of him from the point of view of the formal requirements applicable to the recording of the VAT identification number, there is no specific evidence of tax evasion, the goods have been moved to another Member State and the other conditions of exemption from tax are also met?’
The CJEU judged as follows:
Article 22(8) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, as amended by Council Directive 2005/92/EC of 12 December 2005, in the version resulting from Article 28h of that Sixth Directive, and the first subparagraph of Article 28c(A)(a) and Article 28c(A)(d) of that directive must be interpreted as precluding a tax authority of the Member State of origin from refusing to exempt an intra-Community transfer from VAT on the ground that the taxable person has not provided a VAT identification number issued by the Member State of destination, where there is no specific evidence of tax evasion, the goods have been moved to another Member State and the other conditions of exemption from tax are also met.
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The Opinion in this case as delivered by Advocate General Saugmandsgaard Øe on April 6, 2016 can be found here.
Did you know that in our section CJEU Rulings we have made a selection of rulings of the CJEU? We have organized these rulings based on the subject they relate to (e.g. Freedom of establishment, Free movement of capital, Indirect taxes on the raising of capital, etc).
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