NSS k alokaci přepravy u přeshraničních prodejů zboží

SAC on the allocation of transport in cross-border supplies of goods

In its recent judgment¹ (HERE), the SAC reviewed a chain transaction with cross-border transport. This was a very common situation where the first supplier supplied goods from Italy to its Czech customer, who then resold them to another Czech company (IT→CZ1→CZ2). The goods were transported from Italy directly to the final customer's warehouse. The transport of the goods was organised by the last company in the chain, but the company claimed that the transport was organised on behalf and for the account of the middle Czech company. Thus, the companies considered the first transaction as an intra-community sale with transport and the second transaction as a local domestic sale with Czech VAT.

The tax authorities, on the other hand, attributed the cross-border transport to the second transaction and treated it as intra-community supply. According to them, the last Czech company had already acquired the right to dispose of the goods as an owner in Italy, since it had effectively organised the transport and had not proved that it had organized the transport on behalf of the middle Czech company (CZ1). As a result, the claim for input VAT deduction by VAT payer CZ2 was rejected. The fact that CZ1 was indicated on the CMR certificates, the tax administrator assessed as an attempt to conceal the actual situation.

However, according to the SAC, the tax authorities did not adequately assess the purchaser's intentions and some of the evidence. The SAC also indicates that the fact which company claimed the VAT deduction on the invoice from the carrier may not be decisive for the allocation of the transport. Furthermore, according to the SAC, it is not absolutely necessary that the companies have a written contract stipulating that one company organizes the transport on behalf of the other. Instead, what is relevant is which company could actually decide on the legal situation of the goods (for example, on the sale) during the transport.

The SAC’ judgement sheds further light on the issue of allocation of transport and the provision of transport on behalf and for the account of another company in the chain. We often see similar or identical set-ups during reviews of chain sales, particularly within the same group of companies. Although the intention is that the right to dispose of the goods should be held by the middle company, it is the last company that organises the transport. The reasoning of the SAC can be very useful in these cases. However, it should be remembered that the court emphasises a thorough proof of the factual situation, which can be challenging in practice. We therefore recommend that in similar situations particular attention is paid to the early preparation of sufficiently robust documentation.

If you have any questions on the above topic, please contact the authors of the article or our EY advisory team with whom you work.

Authors:

Jevgenija Bajzíková

Pavol Bezek

[1]  5 Afs 103/2021 - 44