Tax Flash No. 6/2019
The European Court of Justice (“ECJ”) ruled in case C-275/18 Vinš on 28 March 2019
The dispute arose from the decision of the Czech tax authority to reject the VAT exemption for the supplies of goods delivered by Mr. Vinš outside UE because the goods were not placed under the export customs procedure.
ECJ decided that the VAT exemption for supplies of goods delivered outside the EU cannot be conditioned by the customs procedure. The decisive element is that the goods actually left the EU territory.
Contrary to the Czech tax authority, the ECJ considered that:
(i) As long as the taxable person has available evidence of the actual exit of the goods from the EU territory, the VAT exemption for supplies of goods dispatched outside the EU is applicable irrespective on the placing of the goods under the export customs procedure or not.
(ii) The placing under the customs export procedure, whether done before or after the actual delivery of the goods outside the EU, is only a formal obligation which, moreover, belongs not to the common system of VAT but to the customs system. Therefore, non-compliance with that obligation does not preclude compliance with the substantive conditions for the VAT exemption.
Impact in Romania
Currently, Order of the Minister of Public Finance no. 103/2016 makes the VAT exemption for supplies of goods delivered outside the EU subject to the holding by the taxable person of an export customs declaration drawn up in its name. Considering this decision of the ECJ, Order no. 103/2016 will probably have to be revised.
Until then, this decision of the ECJ brings an additional argument in favor of taxpayers in pending disputes with the Romanian tax authority in cases whereby the VAT exemption for exports was denied due to missing or in-compliant customs export declarations (e.g. customs declarations concluded on customer’s name).