Decision of the Spanish Court in connection with excluding from VIES for not carrying out intra-EU transactions within last 12 months


This decision, dated October 23, 2014, solves the treatment in connection with the VIES Registry applicable to a company which, although has not been involved in intra-EU transactions during the past 12 months, can carry out them at any time, and its de-registration from VIES could affect to its business opportunities.

Article 10.2.e) of the Spanish Regulations (applicable for VIES) mentions that entities which, during the past 12 months have not been involved in intra-Community transactions of goods or services, must be removed from the VIES.

However, the direct VIES de-registration, for the simple fact of not intervening in intra-EU transactions over the past 12 months, is not included in the EU Directive.

In this sense, the case-law of the ECJ has indicated that the obtaining of a VAT identification number for the purposes of VIES, is merely a formal requirement for monitoring purposes which cannot block the right to deduct VAT on an intra-EU supply of goods if the substantive requirements are met.

The Spanish Administrative Court considers that Article 10.2.e) (above mentioned) must be understood in accordance with the provisions of the EU Directive and the principle of proportionality, so it should not apply a VIES de-registration, ex officio, by the mere fact of not carrying out any intra-Community transactions within twelve months, without carrying out an analysis of the specific circumstances of the company that founded indications show that the number is to be used fraudulently.

While the twelve-month period may be considered a reasonable time for the purpose of constituting an indication to consider the overall assessment of the risk of fraud, this fact should be strengthened by the presence of other elements of targets to suspect a fraudulent intent on the part the taxpayer.

However, in this case, the only circumstance that determines the de-registration from VIES is not carrying out any intra-EU transactions during last twelve months, although the company continues to develop its business and is not understood by the Administration to go to use this identification number fraudulently, for all these reasons, the Spanish Administrative Court decides in favour of the company cancelling the company’s de-registration from VIES.

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