This is to draw your attention to CJEU’s judgment of 7 September 2023 in case no, C‑461/21 where the European court took a position regarding, among other things, the formal requirements for VAT exemption of carriage services involving imported goods. Under Polish legislation governing such services, the rule is basically that the supplies are zero rated (subject to conditions).

The case before CJEU involved a Romanian company (“Company”) which provided carriage services between a member state of importation and another member state (member state of destination). Based on the documents in its possession (CRM consignment note and transit summary declaration with MRN, allowing the transport to be linked to importation of goods and confirming that the value of the services was included in the taxable basis in respect of the importation), the Company exempted the services from VAT. However, Romanian tax authorities questioned that exemption as the Company did not have certain documents required by national law.

But CJEU held that where substantive conditions for the exemption are satisfied, the lack of documents required by national law cannot automatically trigger a refusal by tax authorities to exempt carriage services for imported goods from VAT. According to CJEU, VAT exemption applies also where the taxable person produces evidence other than one required by law to show that:

  • the carriage services involve importation of goods, and
  • the value of the carriage services is included in the taxable amount of the imported goods.

With that said, CJEU noted that the authenticity and reliability of such other evidence submitted by the taxable person may not be doubted while the person may not be involved in tax fraud.

Under Polish law, the zero rate of VAT applies to services directly related to importation of goods if the taxable person keeps documents clearly showing that the value of the services is included in the taxable amount of the imported goods and that the services are not insurance services and do not  concern VAT-exempt imports. While the law does not specify what documents are required in such a situation, CJEU’s judgment has made it so that any authentic and reliable evidence should be accepted by tax authorities.

This case may affect the zero rating of services involving international carriage of goods. That is because among the evidence which Polish tax law requires Polish taxable persons to hold in such cases is a document acknowledged by a customs and revenue office, which tends to be difficult to obtain.

If this issue pertains to your business and you are interested in our assistance, please contact us.

This blog post is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.