VAT News N° 2 2018

Welcome to our monthly VAT News intended for companies having activities across the 28 Member States.

You will find here below updated information and schemes on a country-by-country basis.

E.U., Austria, Germany and Portugal.


Supply Chain – Which supply is zero-rated ? (C-628/16)

In accordance with earlier cases relative to A-B-C transactions, the ECJ ruled that the first sale (by A) may not be zero-rated where C may dispose of the goods in the Member State of departure before the intra-Community transport takes place.

The Court even goes a step further: where C may dispose of the goods in the Member State of departure, the supply by A may not be zero-rated even if B presents itself with a VAT number issued by the country of destination and A has not been informed that the goods would be resold by B to C.

That case-law again shows that the allocation of transport to a well-defined supply in the chain is crucial. The ECJ proves to be even stricter than in a previous case-law where A was given conclusive information (shipment and VAT registration number) allowing to treat first supply as a zero-rated one under certain circumstances (see ECJ C-430/09).

The businesses involved in intra-Community trade should be very careful, especially where they are not in charge of the transport. In the latter situation, they do indeed not necessarily have all the information allowing to determine in which commercial relationship the transport is deemed to take place and the risk is therefore high that the VAT exemption is erroneously applied.


Compliance check regarding VAT refunds

The European Commission launched a compliance check to assess whether VAT refunds procedures by EU Member States are in line with current EU law and case law of the European Court of Justice. Over the next eight months, tax provisions in each Member State will be scrutinised to ensure that refund procedures allow businesses to quickly and easily recover VAT credits both in their own country and in other EU countries. The Commission could decide to launch infringements procedures in cases of non-compliance with the rules.

It is apparent that some EU countries make use of time-consuming and unfair procedures to process VAT refund claims. Such initiative of the European Commission is likely to put pressure on reluctant authorities to follow the relevant EU regulations. Businesses which are experiencing trouble in obtaining VAT refund in specific countries may contact us in order to draw attention of the Commission on concrete cases.



VAT rate decrease on accommodation services

Austria will decrease the VAT rate on accommodation services. These services will be rated at 10% (instead of 13%) as from 01/11/2018.



E-Commerce – Joint Liability of Platform Operators

The governing coalition agreement considers new legislation to tackle VAT fraud on e-commerce of goods. Under this new system, operators of electronic platform which do not preclude non-compliant traders from using their platform will be liable for VAT that would not be paid by such traders.

After France and the UK, Germany is already rendering electronic platforms liable ahead of the EU Commission project that will enter into force in 2021.



Importation – Deferred Payment

Since 01/03/2018, deferred payment of import VAT has been made applicable to all types of tangible goods. Such deferment prevents cash flow inconvenience on import VAT since it is simultaneously paid and recovered.



See also our lasts VAT news: 

VAT News N° 4 2016

VAT News N° 3 2016

VAT News N° 2 2016

VAT News N° 1 2016

VAT News 08

VAT News 07

VAT News 06

VAT News 05

VAT News 04


Are you interested to receive more information about this topic or to discuss your specific case with a VAT expert? Do not hesitate to send us an email or set up a free conference call with us.















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