ECJ judgment: Triangular transaction simplification in case of late EC Sales Lists filings

Hans Bühler KG („Hans Bühler“) is a German resident company, which has been registered for VAT purposes in Austria between October 2012 and March 2013. An Austrian VAT-ID number had been issued for this period. During this period, Hans Bühler carried out triangulation transactions. Hans Bühler purchased goods from a German company and sold these goods to a Czech company. The goods had been delivered directly from Germany to the Czech Republic. Hans Bühler as the middleman in the triangulation transaction has used its Austrian VAT-ID number for the purchase of the goods. In the invoices issued to the Czech buyer, Hans Bühler included its Austrian VAT-ID number as well the Czech VAT-ID number of the buyer.

Furthermore, the invoice contained the statement that the simplifications for triangular transactions apply and that the tax liability is shifted to the recipient. In February 2013, Hans Bühler filed EC Sales Lists for the sales in the period October 2012 to January 2013. The statements included the Austrian VAT-ID number of Hans Bühler, the Czech VAT-ID number of the buyer and the tax base. However, the statements did not mention that the declared transactions were triangular transactions. In April 2013, Hans Bühler corrected this omission and also filed the EC Sales Lists for February and March 2013. At this date, the Austrian VAT-ID number of Hans Bühler has no longer been active.

National Austrian Interpretation.

The Austrian tax office deemed the triangular transactions unsuccessful. In their opinion, on the one hand Hans Bühler as middleman did not meet the specific declaration obligations (late filing of EC Sales Lists) and on the other hand the entity did not provide proof that VAT was assessed for the Czech buyer. As Hans Bühler had used its Austrian VAT-ID number, the Austrian tax office qualified the purchase of the German goods as intra-community acquisition in Austria and accordingly assessed VAT. The Austrian Federal Fiscal Court (BFG) followed the reasoning of the tax office and Hans Bühler subsequently filed for revision with the Austrian Administrative Court (VwGH). The Austrian Administrative Court referred two questions to the ECJ for a preliminary ruling.

Questions.

The Austrian Administrative Court raised the question whether the residency and VAT registration of the buyer in the Member State of dispatch contradicts the applicability of the triangulation transaction regulations. Furthermore, it raised the question whether the late filing of EC Sales Lists leads to a non-applicability of the triangulation transaction regulations.

ECJ judgment.

In its answer to the first question, the ECJ pointed out that not only the wording but also the context and intentions have to be taken into consideration in the interpretation of Union Law (see ECJ judgement dated 19 April 2018, Hans Bühler KG, C-580/16, ECLI:EU:C:2018:261). If the middleman is registered for VAT purposes in several Member States, only the VAT-ID number under which the corresponding ic-acquisition has been made has to be taken into consideration for the evaluation of individual triangulation transactions. The application of the triangulation transaction regulation cannot be denied just because the middleman is also registered for VAT purposes in the Member State of dispatch.

In its answer to the second question, the ECJ sees a material prerequisite for the buyer proving that the purchase was made in order to carry out a subsequent domestic sale in the Member State of destination and that the buyer is liable for tax payments (Art. 42 a VAT Directive). The filing of an EC Sales Lists on the contrary is considered mere a formal prerequisite by the ECJ (Art. 42 b VAT Directive). Based on the principle of fiscal neutrality of VAT, the ECJ states that VAT shall be deemed to have been applied on the (fictional) ic-acquisition even if the formal requirements are not met in due time. In the initial EC Sales Lists, Hans Bühler reported its VAT-ID, the VAT-ID of the buyer as well as the tax basis. Neither the VAT Directive nor the Austrian VAT Laws specify further information requirements (e.g. explicit reference to triangular transactions) to be included in the EC Sales Lists in case of triangular transactions. Thus, the ECJ regarded the filed EC Sales Lists as correct. The late filing of a correct EC Sales Lists is not harmful for the application of the triangulation transaction regulations (exception: tax evasion or cases in which the material prerequisites can no longer be proven due to formal defects). Furthermore, the ECJ points out, that the VAT-ID number of the middleman has to be valid at the date of the purchase and not at the filing date of the EC Sales Lists.

Summary.

The ECJ judgment thus confirms that it is not harmful for triangular transactions if the middleman is also registered for VAT purposes in the Member State of dispatch and if he uses a VAT-ID obtained in a third country for a specific triangular transaction. Furthermore, the mere late filing of an otherwise correct EC Sales Lists cannot lead to the assessment of a fictional ic-acquisition („failed triangulation transaction“) if the material prerequisites are met.

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Jutta Schmidt

Jutta Schmidt

Manager | Deloitte Tax Telefon: +43 1 537 00 4952 Mail: juschmidt@deloitte.at

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