In this litigation, the Tax Administration of Poland denied the application of the VAT exemption for export of goods to an entity that had sold mobile phones to two Ukrainian entities, having shipped them outside the territory of the European Union. The reason for the refusal was that, despite the fact that the export process had been carried out effectively, the goods had not been acquired by the entities mentioned in the invoices, but by other entities that could not be identified.

In addition, in a subsequent appeal, the competent Court considered that one of the two Ukrainian companies was a screen entity, which served to commit tax fraud and that the other entity was not the economic operator that had acquired the mobiles. For this reason, the Court considered that there had been no delivery of goods for VAT purposes and that operation could not be described as export.

However, before the Supreme Court, the company alleged that the application of the exemption had been linked to the fulfilment of formal requirements, having met the material requirements, in addition to a wrong interpretation because in opinion of the Tax Authorities it considered that the delivery of goods is only effective when the operator mentioned in the invoice as an acquirer is identical to the one that participates in the operation as such, which leads to not qualifying the operation as an export but to its qualification, however, as delivery of goods subject to the national rate. In these circumstances, the referring Court raises its doubts, when the export is not discussed, if it is necessary that the purchaser of the goods is the actual recipient, in addition to the doubt about whether an eventual fraud in a third territory in which the goods have been exported is relevant for the application of the exemption. Finally, it also raises the question of whether non-qualification as an export should lead to the consideration of a national supply of goods, when it should be understood that it is not a supply of goods subject to VAT and therefore does not generate the right to deduct the VAT borne.

The ECJ considers that the questions referred for a preliminary ruling concern whether Articles 146 and 131 of the VAT Directive, together with the principles of fiscal neutrality and proportionality, should be interpreted to mean that they are contrary to the national legislation that consists in considering, in all cases, that there is no supply of goods and the right to exemption is denied when the goods are transported outside the EU and the acquirer is not the person stated on the invoice, as well as the impact on the application of the exemption for a possible fraud committed in a third country outside the EU.

In this sense, as the ECJ has already stated, Article 146 considers that there is an export, and therefore the VAT exemption is applicable, when the power of disposal of the goods, as owner, has been transmitted to the acquirer, when it is proved that the goods have been transported outside the EU and when the goods have physically left said territory. Therefore, the fact that the goods are acquired by an entity other than the one on the invoice does not exclude that these objective criteria are met. In addition, taking into account the principle of fiscal neutrality and proportionality, if the material requirements are met, the exemption must be applied even if the formal requirements have not been fulfilled, except in two cases:

  1. That said breach results in an impediment to the provision of proof that the material requirements have been met. Therefore, if the recipient’s lack of identification prevents to prove that there is a supply of goods, the exemption may be denied, although not in all cases.


  1. That the taxpayer deliberately participated in a tax fraud, which would lead to not being able to invoke the principle of fiscal neutrality.

Therefore, the Court concludes that the articles in question are contrary to a national practice that consists in considering, in all cases, that there is no supply of goods and in denying the right to exemption, when the goods have been exported outside of the EU and it has been proven that the acquirer was not the recipient of the invoice, but only if the lack of identification prevents verifying that the operation is actually a supply of goods or if it is demonstrated that the taxpayer should have known that the operation was related to tax fraud.

The Court also concludes that if the right to VAT exemption is denied, it should be considered that the operation does not constitute a taxable operation and therefore does not confer the right to deduct the VAT incurred, instead of considering that there is a national supply.

The judgment case-law number is C-653/18.

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