Intra-community delivery: the CJEU recalls that the proof of transport is free

A Croatian tax dispute currently before the Court of Justice of the European Union (CJEU) reinforces the French practice applicable to intra-Community deliveries. The question asked is simple: can the tax authority refuse an exemption from VAT for purely formal reasons, even though it recognizes that the intra-Community supply did take place? Is the list of documents provided for in article 45 bis of the Regulation a mandatory exhaustive list?

1. A tax audit calling into question the exemption

The dispute is between Croatian society FLO VENEER, active in the trade of goods, at the Croatian Ministry of Finance (Ministarstvo Financija).

During an audit covering the first quarter of 2020, the administration examined several intra-community sales transactions carried out by FLO VENEER to a customer based in Slovenia. These transactions were invoiced exempt from VAT in accordance with Article 138 of the VAT Directive.

To justify this exemption, the company communicated:

• the corresponding invoices;
• waybills (CMR);
• shipping certificates;
• written statements from the Slovenian customer confirming receipt of the goods.

On 8 October 2020, the Croatian tax authority issued a tax notice claiming VAT on the transactions in question.

Major point: administration Do not dispute that the goods were transported from Croatia to Slovenia.

Her refusal of exemption is based exclusively on a particularly strict reading of the rules: despite the documentation provided, she considers that the conditions for benefiting from the exemption were not fully met if the presumptive conditions provided for in Article 45 bis were not met.

After the rejection of its claim, FLO VENEER referred the matter to the Administrative Court of Zagreb.

2. Reminder of the intra-Community supply regime

a. Exemption from intra-Community deliveries

In accordance with article 138 of Directive 2006/112/EC (hereinafter “VAT Directive”) transposed in France to article 262 ter of the French Tax Code (FTC), supplies of goods shipped from a Member State to another Member State are exempt from VAT under the following conditions:

• the transaction is carried out for consideration by a taxable person;
• the goods are shipped from one Member State to another;
• the customer has a valid intra-community VAT number based on VIES. This number must have been assigned by a Member State other than that of departure of the goods;
• the seller has filed a summary statement in the Member State of departure of the goods.

b. The principle of the presumption of transport

Regulation No. 2018/1912 introduced a new article 45 bis into implementing regulation No. 282/2011 which specifies the documentary evidence that must be held by the supplier in order to justify the intra-community transport of goods and therefore the application of the exemption provided for by article 262 ter I of the FTC.

This regulation provides for a simple presumption of transport: provided that he is in possession of the combinations of documents provided for in Article 45a, the taxable person is entitled to benefit from the VAT exemption. However, the tax authorities can challenge this exemption by showing that:

• the delivery did not take place in the other Member State;

• the documents provided are false or it is a fraud scheme.

The rules of evidence differ depending on whether the seller or the buyer is in charge of transporting the goods.

If the seller is in charge of transport, he must have:

• either two pieces of evidence relating to transport (CMR, transport invoice, delivery note, etc.);

• either one piece of evidence relating to transport plus one other item from the list established in article 45 bis 3 b of the regulation: Insurance policy or bank document proving payment for transport, Official document issued by a public authority attesting to the arrival of the goods in the Member State of destination or Receipt issued by a warehouseman in the Member State of destination attesting to the storage of the goods in that Member State of destination.

If the buyer is in charge of the transport, the seller must have a certificate from the purchaser confirming the receipt of the goods, which must be provided to the seller within 10 days of delivery and the same evidence as in the event that the seller is in charge of transport.

It should be noted that all of the evidence reported must come from two different parties who are at the same time independent of each other, of the seller and of the buyer. In this context, the documents must not only be communicated by the carrier alone but at least another independent third party (service provider in charge of loading, bank, etc.).

c. The French position in the absence of application of the presumption

According to the French position (supported by the CJEU decision), when a taxable person does not have the evidence provided for by the regulation, the presumption does not apply. In this context, the taxable person must prove intra-Community transport by any means.

Thus, in accordance with administrative doctrine (BOI-TVA-CHAMP-30-20-10, paragraphs 50 and following), the means of proof may be direct or indirect. These may therefore be the usual commercial or transport documents:

• transport document (CMR consignment note, air waybill, sea or river bill of lading, etc.),

• carrier invoice,

• insurance contract relating to the international transport of goods, contract concluded with the purchaser, commercial correspondence,

• written order form from the purchaser indicating that the goods must be sent or transported to another Member State,

• delivery note,

• removal voucher,

• written confirmation by the purchaser that the goods have been received in another Member State,

• double of the seller's invoice stamped with the purchaser's stamp,

• notice of payment from a foreign banking institution.

This list is not exhaustive and does not constitute a list enforceable against the tax authorities within the meaning of article L.80 B of the Tax Procedures Book (CE, July 1, 2009, No. 295689, 9^E and 10^E s.-s., SARL Alain Palanchon).

3. In the CJEU judgment, the taxpayer recalls that the regulation did not call into question the free evidence regime.

In court, FLO VENEER supports a position based on the principle of fiscal neutrality and the case law of the CJEU (in particular the judgment Euro Tyre from 2010).

The company's argument is as follows:

1. Article 45 bis Is only one presumption, a proof facility designed to help businesses easily demonstrate that delivery has taken place.
2. If a taxable person does not have the exact details for benefit from this presumption, he does not automatically lose his right to exemption.
3. In this case, he must have the right to prove by any other means That the background conditions (required by Article 138 of the VAT Directive) are fulfilled.
4. The main substantive condition is the physical transport of goods from one Member State to another.

Since the tax administration itself admits that this transport took place, refusing the exemption on the basis of a defect in form would violate the principle of fiscal neutrality.

4. The CJEU confirms the operator's position

a. Proof of transport is always free, apart from presumption.

The core of the Court's reasoning is based on simple textual analysis.

• Article 138 of the VAT Directive Establish the conditions In the background for the exemption: 1) a transfer of ownership 2) to another taxable person 3) acting as such in another Member State, and 4) a physical dispatch of the goods out of the State of departure.
• Article 45 bis of the Implementing Regulations, on the other hand, only creates a presumption of transport.

The Court notes that the text lists the cases in which the transport “is presumed” to have taken place. Nowhere does it indicate that these documents are the Alone acceptable means of proof. Therefore, if a taxable person does not meet the conditions to benefit from this presumption (for example, he is missing a document from the list), he does not lose his right to the exemption.

He retains the right to prove, through an overall assessment of all evidence in its possession, that the substantive condition (transport) has been met. The tax administration, for its part, has The obligation to examine this other evidence.

Refusing exemption to a company on the sole ground that it does not fall within the scope of this presumption, even though it can prove the reality of the delivery by other means, would be a contradiction. As the Court points out, this “would call into question the objective of promoting intra-Community trade”.

b. A contrary reading would call into question the principle of fiscal neutrality.

The Court relies firmly on its established case-law, in particular the judgment Euro Tyre (C‑430/09 of 16 December 2010). This judgment had already established that the Principle of fiscal neutrality requires that exemption be granted if the substantive conditions are met, “even if some formal requirements have been omitted.”

The loss of the right to exemption for formal reasons is an exception that can only be applied in two very strict cases:

1. If the taxable person has intentionally participated in tax evasion (which was not the case with FLO VENEER).
2. If the violation of the formal requirement has the effect ofPrevent providing certain proof that the substantive requirements have been met.

In the Croatian case, this second point is crucial. Not only did the absence of the article 45 bis documents not prevent the transport from being proved, but the tax authority itself had admitted that the goods had been transported ! The refusal of exemption was therefore indefensible.

5. The impact in France: securing the practice

This decision, although issued on a Croatian case, has a direct resonance in France.

Article 262, ter of the FTC is the French transposition of article 138 of the VAT Directive. It establishes the principle of the exemption of intra-Community supplies. The way to prove these deliveries is detailed in the administrative doctrine (BOFIP-TVA-CHAMP-30-20-10).

French doctrine, even before the introduction of article 45 bis, already recognized that proof of transport could be provided “by any means”. Article 45 bis was integrated into the BOFIP as a presumption, a secure route, but not as an exclusive way.

It is therefore important to remember:

• A French company that is subject to a tax audit and does not have the complete set of documents provided for in article 45 bis (for example, a CMR not signed by the recipient) cannot be refused automatic exemption.
• The judgment confirms that the French tax authorities have a legal obligation to examine the other evidence provided: alternative delivery notes, commercial correspondence, proof of payment, transport insurance documents, geolocation data (GPS) of trucks, etc.
• The only valid question is: “Did the property physically leave French territory or not for another Member State?” If the company can prove that yes, and that there is no fraud, the exemption from article 262 ter of the FTC is legal.

In conclusion, the Court of Justice of the EU is sending a clear message: the presumption of Article 45bis is a shield for the taxpayer, it cannot be used against him by the tax administration of the Member State.

Without upsetting French practice, it allows operators to expect the same interpretation throughout the EU.