Prisny pohled NSS na prokazovani prepravy zbozi do EU

Strict view of the Supreme Administrative Court on proving the transport of goods to the EU

The Supreme Administrative Court ("SAC") issued a very interesting and cautionary judgment 5 Afs 202/2021, in which it dealt with the fulfilment of the conditions for the exemption of supplies of goods to the EU. In particular, the case concerned the supply of 50 new trucks to Germany, the customer being a well-established logistic company. It was thus probably not tax fraud but rather a poor transport arrangement in the supply chain.

According to the tax administrator and the Supreme Administrative Court, the Czech supplier did not prove that the transport to the EU was arranged by himself, his purchaser or an authorised third party. The other conditions for exemption were not in dispute. It is interesting that the Company had a variety of proofs at its disposal - the purchase contract, tax documents, handover reports, declaration of receipt of vehicles in Germany, technical certificates of vehicles registered in several different EU countries, acceptance declarations, bank payments, EU acquisition tax declaration report, report of oral meeting with the company's managing director.

The SAC agreed with the tax administrator's view that none of these documents individually proved that the transport was arranged by a particular entity and that, taken together, the evidence was so contradictory that it could not prove that the company, the purchaser or an authorised third party had arranged the transport of the vehicles to Germany. The main contradiction was that the acceptance protocols were confirmed by another related company from the same Group (the mother on behalf of her daughter).

In practice, we often see that sales of goods in a related group are often accompanied by insufficient and vague proofs. In most cases, this is not tax fraud but rather negligence. Companies often rely on the group buyer to send them proofs of the shipment on demand when an audit comes. The consequence can be not only loss of exemption for direct supplies to the EU, but also incorrect allocation of transport for chain supplies of the same goods.

If you are in the position of a supplier of goods, we will be happy to assist you with a simulated VAT audit of proofs and setting up the correct control mechanisms and contractual documents towards the customers who arrange the transport of goods.

Authors:
Jevgenija Bajzíková
Štěpán Kvíz