Germany intra-community nil VAT rating
A lower tax court in German has ruled that full accounting and invoice records are not a prerequisite for entitlement to zero nil VAT rating on intra-community supplies.
The case under review concerned a German carpet seller who transferred stocks of carpets from its site in Germany to a warehouse in Netherlands. Under EU VAT Directive, this may be considered an intra-community dispatch from German and arrival in the Netherlands. As it was a self-supply, it was entitled to nil-VAT rating under the simplification rules on EU cross border supplies.
However, the seller did not fully report the movement, nor self-invoice itself as required under most countries’ VAT codes. The German tax authorities contended that this undermined the nil-VAT status, and German VAT at 19% was due.
German intra-community supply ruling
The German tax courts held that the accounting requirements were not a substantial element of the determinants of intra-community supplies, and the supply on an intra-community basis was clearly evident. This was even though the seller had no Dutch VAT number to verify that it was an intra-community supply.
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