VAT Newsletter 1/2014
The European Court of Justice (“ECJ”) has ruled on case C-563/12 (BDV)
The dispute in this case refers to the Hungarian tax authorities’ refusal to classify certain operations performed by BDV Hungary Trading Kft (“BDV” or “the Company”) as exports of goods for which the VAT exemption is applicable.
BDV, a Hungarian company that performs wholesale trade with cans, sold as part of its activity products to customers established outside the Community. The agreements concluded by the Company with the customers contained the Incoterms EXW clause, according to which the buyer is responsible for uploading the goods from the seller’s premises and to transport them outside Hungary. Despite the fact that the Company notified its customers that the transport of exported goods must be performed within a certain period in order to qualify for the VAT exemption, this deadline was exceeded in certain cases.
As such, the tax authorities considered that the operations performed by BVD did not qualify as exports of goods and were not VAT exempted.
ECJ concluded that the provisions of the VAT Directive must be interpreted as precluding national legislation under which, in the context of a supply for export, goods intended to be exported from the European Union must have left the territory of the European Union within a fixed period of three months or 90 days following the date of supply, where merely exceeding that time limit results in the definitive loss for the taxable person of the right to exemption in relation to that supply.