The supply of goods exported from the EU may be subject to the 0% rate of VAT. One of the conditions is that the transport of the goods outside the EU takes place as part of the supply.
Output
Export means physically taking the good to a place outside the EU. What matters for the application of the 0% rate is that the export takes place in the context of the supply of the goods. In the context of a WOB request, the Inland Revenue sent out the position on the export of (sport) horses published.
Horses
The question submitted to the knowledge group concerns (top sport) horses sold by a Dutch entrepreneur to buyers residing or based outside the EU. The delivery of the horse takes place shortly after the award. But then the horse remains in the seller's stable for 2 to 6 months, only to be transported outside the EU afterwards.
The knowledge group concludes that:
- the transport of the horse is still in the context of the supply if the horse is trained during the (extended) stay with the supplier to maintain its condition (and then the 0% rate may be applied for VAT; the knowledge group does add that a longer period of stay in the Netherlands makes it less plausible that the training is only aimed at maintaining the horse's condition);
- but if the horse is (further) trained during this period, such that the condition of the horse at the time of export from the EU has changed compared to the condition at the time of supply, there is no longer a sufficient link between the supply and the transport from the EU (with the result that the supply should be taxed with VAT at the general VAT rate of 21%).
Burden of proof
The burden of proof that all conditions to apply the 0% rate have been met rests on the entrepreneur supplying the good. If the Inland Revenue subsequently finds that this burden of proof has not been met, VAT is retrospectively levied on the entrepreneur supplying the good (and in most cases a hefty penalty is also imposed).