ECJ C-580/16 (Hans Bühler) – Judgment – A VAT list submitted too late is not a reason to refuse a VAT exemption

On April 19, 2018, the ECJ issued its decision in the case C-580/16 (Hans Bühler).

Context: Reference for a preliminary ruling — Taxation — Value added tax (VAT) — Directive 2006/112/EC — Place of intra-Community acquisition — Article 42 — Intra-Community acquisition of goods that are the object of a subsequent supply — Article 141 — Exemption — Triangular transaction — Simplification measures — Article 265 — Correction of recapitulative statement

Article in the EU VAT Directive

Articles 42, 141, 265 of the EU VAT Directive 2006/112/EC.

Article 42 (Place of Supply of Goods – Triangulation)
The first paragraph of Article 41 shall not apply and VAT shall be deemed to have been applied to the intra-Community acquisition of goods in accordance with Article 40 where the following conditions are met:
(a) the person acquiring the goods establishes that he has made the intra-Community acquisition for the purposes of a subsequent supply, within the territory of the Member State identified in accordance with Article 40, for which the person to whom the supply is made has been designated in accordance with Article 197 as liable for payment of VAT;
(b) the person acquiring the goods has satisfied the obligations laid down in Article 265 relating to submission of the recapitulative statement.

Article 141 (Exemption for intra-Community of Goods)
Each Member State shall take specific measures to ensure that VAT is not charged on the intra-Community acquisition of goods within its territory, made in accordance with Article 40, where the following conditions are met:
(a) the acquisition of goods is made by a taxable person who is not established in the Member State concerned but is identified for VAT purposes in another Member State;
(b) the acquisition of goods is made for the purposes of the subsequent supply of those goods, in the Member State concerned, by the taxable person referred to in point (a);
(c) the goods thus acquired by the taxable person referred to in point (a) are directly dispatched or transported, from a Member State other than that in which he is identified for VAT purposes, to the person for whom he is to carry out the subsequent supply;
(d) the person to whom the subsequent supply is to be made is another taxable person, or a non-taxable legal person, who is identified for VAT purposes in the Member State concerned;
(e) the person referred to in point (d) has been designated in accordance with Article 197 as liable for payment of the VAT due on the supply carried out by the taxable person who is not established in the Member State in which the tax is due.

Article 265 (Racapitulative statememts)
1. In the case of intra-Community acquisitions of goods, as referred to in Article 42, the taxable person identified for VAT purposes in the Member State which issued him with the VAT identification number under which he made such acquisitions shall set the following information out clearly on the recapitulative statement:
(a) his VAT identification number in that Member State and under which he made the acquisition and subsequent supply of goods;
(b) the VAT identification number, in the Member State in which dispatch or transport of the goods ended, of the person to whom the subsequent supply was made by the taxable person;
(c) for each person to whom the subsequent supply was made, the total value, exclusive of VAT, of the supplies made by the taxable person in the Member State in which dispatch or transport of the goods ended.
2. The value referred to in paragraph 1(c) shall be declared for the period of submission established in accordance with Article 263(1) to (1b) during which VAT became chargeable.

Facts

Firma Hans Bühler, a limited partnership, established and identified for VAT purposes in Germany, operates a production and trading business in that Member State. From October 2012 to March 2013 it was also identified for VAT purposes in Austria, where it planned to set up a permanent establishment.
During that period, Firma Hans Bühler used the Austrian VAT identification number exclusively for transactions that took place as follows: it bought products from suppliers established in Germany and sold them to a customer established and identified for VAT purposes in the Czech Republic. The products were dispatched directly from the German suppliers to the Czech final customer.
The German suppliers gave their German VAT identification number and the Austrian VAT identification number of Firma Hans Bühler on their invoices to that undertaking. Firma Hans Bühler in turn sent invoices to the final customer on which it indicated its Austrian VAT identification number and the Czech VAT identification number of its customer. Those invoices also stated that the transactions were ‘intra-Community triangular transactions’ and that the final customer was therefore liable to pay the VAT.
On 8 February 2013, Firma Hans Bühler submitted to the Austrian tax authorities recapitulative statements for the period from October 2012 to January 2013 in which it gave its Austrian VAT identification number, as well as the Czech VAT identification number of the final customer. No mention was made under ‘triangular transactions’. Only in a letter of 10 April 2013 did Firma Hans Bühler correct those recapitulative statements by stating that the reported transactions formed part of triangular transactions. On the same date, it also submitted recapitulative statements for the months of February and March 2013.
The City of Graz Tax Office concluded that the transactions reported by Firma Hans Bühler were ‘abortive triangular transactions’ because that taxable person had not fulfilled its special obligations concerning the duty to declare and had not proved that the transaction had been subject to VAT upon final acquisition of the goods in the Czech Republic. The City of Graz Tax Office also maintained that, even though the intra-Community acquisitions had occurred in the Czech Republic, they were also deemed to have been effected in Austria, since Firma Hans Bühler had used an Austrian VAT identification number. The City of Graz Tax Office therefore decided to charge VAT on the intra-Community acquisitions made by Firma Hans Bühler.
Firma Hans Bühler challenged that decision before the Bundesfinanzgericht (Federal Finance Court, Austria), which dismissed its appeal. According to that court, in order to determine whether Firma Hans Bühler could benefit from the VAT exemption on its intra-Community acquisitions, it had to fulfil its special obligations concerning duty to declare. However, the reference to triangular transactions did not appear on the initial recapitulative statements for the period from October 2012 to January 2013. That, therefore, deprived it of the benefit of the exemption, pursuant to Article 25(2) of the 1994 UStG. The Bundesfinanzgericht (Federal Finance Court) also held that the Austrian VAT identification number issued to Firma Hans Bühler was no longer valid on 10 April 2013 and that the undertaking therefore had also failed to fulfil the obligations concerning duty to declare in respect of the transactions carried out in February and March 2013.
Firma Hans Bühler brought an appeal on a point of law against the decision of the Bundesfinanzgericht (Federal Finance Court) before the Verwaltungsgerichtshof (Administrative Court, Austria). The referring court expresses doubts as to the assessment of the City of Graz Tax Office and the Bundesfinanzgericht (Federal Finance Court) with regard to the taxation of the transactions in question.

Questions

(1) Is Article 141(c) of [the VAT Directive], on which the non-application of the first paragraph of Article 41 of [the VAT Directive] depends, in accordance with Article 42 (read in conjunction with Article 197) of [the VAT Directive], to be interpreted as meaning that the requirement laid down in that provision is not met where the taxable person is resident and identified for VAT purposes in the Member State from which the goods are dispatched or transported, even if that taxable person uses the VAT identification number of another Member State for that specific intra-Community acquisition?

(2) Are Articles 42 and 265 [of the VAT Directive], read in conjunction with Article 263 [of the VAT Directive], to be interpreted as meaning that the first paragraph of Article 41 of [the VAT Directive] is rendered inapplicable only if the recapitulative statement is submitted in good time?

AG Opinion

(1) Article 141(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the taxable person, who meets the conditions governing identification referred to in subparagraph (a) of that article, must have made the acquisition of goods referred to in subparagraph (b) of that article under a VAT identification number issued by a Member State other than that from which the goods are dispatched or transported for the intra-Community acquisition at issue, regardless of whether he is established or identified for VAT purposes in that Member State.

(2) Article 42(b) of Directive 2006/112 must be interpreted as precluding a tax authority of the Member State which issued the VAT identification number under which the taxable person made an intra-Community acquisition, for the purposes of a subsequent supply, from refusing to exempt that acquisition from VAT on the sole ground that the recapitulative statement, referred to in Article 265 of that directive, was submitted late or subsequently corrected by the taxable person, even though there is no specific evidence of tax fraud and it is established that the substantive conditions for exemption are satisfied.

Decision

1. Article 141(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2010/45/EU of 13 July 2010, must be interpreted as meaning that the requirement laid down in that provision is met where the taxable person is resident and identified for value added tax (VAT) purposes in the Member State from which the goods are dispatched or transported, but that that taxable person uses the VAT identification number of another Member State for that specific intra-Community acquisition.

2. Articles 42 and 265 of Directive 2006/112, as amended by Directive 2010/45, read in conjunction with Article 263 of Directive 2006/112, as amended by Directive 2010/45, must be interpreted as precluding the tax authorities of a Member State from applying the first paragraph of Article 41 of Directive 2006/112 solely on the ground that, in the context of an intra-Community acquisition, made for the purposes of a subsequent supply in the territory of a Member State, the recapitulative statement, referred to in Article 265 of Directive 2006/112, as amended by Directive 2010/45, was not submitted in good time by the taxable person identified for value added tax (VAT) purposes in that Member State.

Summary

The ECJ has ruled that

If the taxable person is established and identified for VAT purposes in the Member State from which the goods are dispatched or transported, but uses the VAT identification number of another Member State for the relevant intra-Community acquisition, this is a triangular transaction.

The mere ground that, for an intra-Community acquisition made with a view to a subsequent supply within the territory of a Member State, the taxable person identified for the purposes of VAT in that Member State has not submitted the recapitulative statement in due time, is no reason for the tax authorities to speak of a failed triangular transaction.

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