When businesses supply goods within the EU, they may apply the 0% rate for VAT purposes. However, this is subject to a heavy burden of proof.
Proof
This is evident from a case in which the Gelderland District Court recently handed down a judgement. The case concerns a trader who deals in cars and carries out car repairs. Among other things, he sells cars to customers in other Member States of the European Union. He applies the 0% rate to these supplies, as they constitute intra-Community supplies.
The burden of proof that the conditions for applying this 0% rate are met rests entirely with the business owner. This proof is twofold:
- it must be demonstrated that the goods were actually transported to another Member State as part of the supply AND;
- that the goods have been received in that other Member State by a person liable for VAT there in respect of an intra-Community acquisition of the goods (this evidence is provided by the customer’s VAT identification number, which has been verified prior to the supply via VIES).
Takeaway transactions
A collection transaction occurs when the buyer collects the goods from the supplier. It goes without saying that it is then difficult to provide conclusive evidence that the goods collected have actually been transported to the other Member State.
The business owner in question used collection certificates (no CMR consignment note is drawn up for collection transactions). However, the Tax and Customs Administration is right to (largely) disregard these. On the one hand, it is often unclear who the actual purchaser of the car is (the collection statements only state the destination to which the car is being transported). On the other hand, the trader is already using collection statements for customers who have been with the company for barely a month, whilst the use of collection statements is only permitted for regular customers.