Requirements for a VAT-Exempt Intra-Community Supply in the EU

With the abolition of customs borders within the EU single market, the intra-Community supply was introduced as an independent legal concept: where, in the course of its business, an entrepreneur moves goods from one EU member state to another to a business there, that supply is, under certain conditions, exempt from VAT; conversely, the acquirer in the country of destination must account for VAT on an intra-Community acquisition, which it can generally simultaneously claim as input tax.

Substantive Requirements for the Exemption

• The goods must actually be transported or dispatched from one EU member state to another.
• The acquirer must be a business and must acquire the goods for its business.
• The acquisition must be subject to acquisition taxation in the country of destination.

Since 1 January 2020, the so-called “Quick Fixes” (Directive (EU) 2018/1910 and Implementing Regulation (EU) 2018/1912) have additionally applied EU-wide: the acquirer’s valid VAT identification number and the timely and accurate submission of the EC Sales List have since then been substantive requirements for the exemption, and no longer merely formal requirements; if they are missing, the exemption may be refused.

Evidence of Transport

In addition to the invoice referring to the intra-Community supply, the transport of the goods to the other member state must be evidenced. Recognised forms of evidence in particular are:

• the customer’s confirmation of receipt, stating the name and address of the recipient, the commercial description and quantity of the goods, the place and date of receipt, and the signature of the customer or an authorised representative,
• the CMR consignment note with the recipient’s confirmation of receipt, or
• the “white” forwarder’s certificate or a complete electronic tracking record.

Under the “Quick Fixes” in force since 2020 (specifically Article 45a of Implementing Regulation (EU) No 282/2011), the supplier may, under certain conditions, also rely on a rebuttable presumption of evidence of transport if it can produce at least two mutually non-contradictory items of evidence from independent parties (e.g. a transport document and an insurance policy, or a bank document evidencing payment for the transport); this EU-wide presumption exists alongside the respective national forms of evidence and may, in individual cases, replace them.

If the supplying business cannot evidence the requirements for the exemption, it is obliged to pay the VAT retrospectively in its state of establishment.