Questions 1 and 2
28 By Questions 1 and 2, which should be considered together, the referring court asks, in essence, whether Article 138(1) of Directive 2006/112 is to be interpreted as precluding the tax authority of a Member State from refusing to grant a vendor established in that Member State the exemption from VAT for intra-Community supplies where (i) the right to dispose of goods as owner is transferred, on the territory of that Member State, to a purchaser established in another Member State which, at the time of the transaction, has a VAT identification number in that other Member State and which assumes responsibility for the transportation of those goods to the other Member State and (ii) the vendor satisfies itself that the goods sold have been picked up by the foreign-registered vehicles, and is in possession of the CMRs returned by the purchaser from the Member State of destination, as proof that the goods have been transported to a destination outside the Member State of the vendor.
29 It should be recalled at the outset that an intra-Community supply, which is the corollary of the intra-Community acquisition, is exempt from VAT if the conditions laid down in Article 138(1) of Directive 2006/112 are satisfied (see, to that effect, Teleos and Others, paragraph 28, and Case C-84/09 X [2010] ECR I-11645, paragraph 26).
30 Under Article 138(1) of Directive 2006/112, Member States are to exempt supplies of goods dispatched or transported to a destination outside their respective territories but within the European Union, by or on behalf of the vendor or the person acquiring the goods, for another taxable person, or for a non-taxable legal person acting as such in a Member State other than that in which dispatch or transport of the goods began.
31 In accordance with settled case-law, the exemption of the intra-Community supply of goods becomes applicable only when the right to dispose of the goods as owner has been transferred to the purchaser and the vendor establishes that those goods have been dispatched or transported to another Member State and that, as a result of that dispatch or that transport, they have physically left the territory of the Member State of supply (see Teleos and Others, paragraph 42; Case C-184/05 Twoh International [2007] ECR I-7897, paragraph 23; Case C-285/09 R. [2010] ECR I-12605, paragraph 41; and Case C-430/09 Euro Tyre Holding [2010] ECR I-13335, paragraph 29).
32 As regards, first, the transfer to the purchaser of the right to dispose of tangible property as owner, it should be noted that this is an inherent condition for any supply of goods, as defined in Article 14(1) of Directive 2006/112, and is insufficient in itself to establish the intra-Community nature of the transaction in question.
33 In that regard, it is apparent from the order for reference that it is not disputed that the condition relating to transfer of the right to dispose of goods as owner is satisfied in the case before the referring court, given that, under the contract between the parties, the transfer took place at the time when the goods were loaded on to the means of transportation provided by the purchaser and the Hungarian tax authority did not dispute the fact that the goods had been loaded.
34 So far as concerns, secondly, the vendor’s obligation to establish that the goods have been dispatched or transported to a destination outside the Member State of supply, it should be borne in mind that that obligation must be considered in the specific context of the transitional tax arrangements applicable to intra-Community trade, established for the purpose of the abolition of internal frontiers on 1 January 1993 by Council Directive 91/680/EEC of 16 December 1991 supplementing the common system of value added tax and amending Directive 77/388 with a view to the abolition of fiscal frontiers (OJ 1991 L 376, p. 1) (Teleos and Others, paragraph 21).
35 In that regard, the Court observed that, even if the intra-Community supply of goods is subject to the objective requirement that the goods must have physically left the territory of the Member State of supply, it has been difficult since the abolition of border controls between the Member States for the tax authorities to check whether or not the goods have physically left the territory of that Member State. As a result, it is principally on the basis of the evidence provided by taxable persons and of their statements that the national tax authorities are to carry out the necessary checks (Teleos and Others, paragraph 44, and R., paragraph 42).
36 It is also apparent from the case-law that, in the absence of any specific provision in Directive 2006/112 as to the evidence that taxable persons are required to provide in order to be granted the exemption from VAT, it is for the Member States to lay down, in accordance with Article 131 of Directive 2006/112, the conditions in which intra-Community supplies of goods will be exempt, with a view to ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse. However, when they exercise their powers, Member States must observe the general principles of law which form part of the European Union legal order, which include, in particular, the principles of legal certainty and proportionality (see, to that effect, Case C-146/05 Collée [2007] ECR I-7861, paragraph 24; Twoh International, paragraph 25; X, paragraph 35; and R., paragraphs 43 and 45).
37 It should be noted in that regard that the order for reference does not mention any specific obligations laid down by Hungarian law, such as a list of the documents to be presented to the competent authorities, for the purposes of applying the exemption for intra-Community supplies. According to the explanations given by the Hungarian Government at the hearing before the Court, Hungarian legislation provides only that the supply must be certified and that the level of evidence required will depend on the specific characteristics of the transaction in question.
38 In those circumstances, the obligations imposed upon taxable persons with regard to evidence must be determined in the light of the conditions laid down in that regard by national law and in accordance with the general practice established in respect of similar transactions.
39 According to the case-law of the Court, the principle of legal certainty requires that taxable persons be aware, before concluding a transaction, of their tax obligations (Teleos and Others, paragraph 48 and the case-law cited).
40 The referring court asks, in particular, whether, for the application of the exemption for intra-Community supplies, a Member State may require taxable persons to ensure that the goods have physically left the territory of that Member State.
41 On that point, the Court has observed that, where there appears to be no tangible evidence to substantiate the conclusion that the goods concerned have been transferred out of the territory of the Member State of supply, to oblige taxable persons to provide conclusive proof of this does not ensure the correct and straightforward application of the exemptions. On the contrary, that obligation places taxable persons in an uncertain situation as regards the possibility of applying the exemption to their intra-Community supplies or as regards the need to include VAT in the sale price (see, to that effect, Teleos and Others, paragraphs 49 and 51).
42 Furthermore, it should be pointed out that, where the purchaser has the right to dispose of the goods as owner in the Member State of supply and where that person assumes the obligation of transportation of those goods to the destination Member State, account must be taken of the fact that the evidence that the vendor might submit to the tax authorities depends essentially on information that it receives for those purposes from the purchaser (see, to that effect, Euro Tyre Holding, paragraph 37).
43 The Court accordingly found that, once the vendor has fulfilled his obligations relating to evidence of an intra-Community supply, where the contractual obligation to dispatch or to transport the goods out of the Member State of supply has not been satisfied by the purchaser, it is the latter which must be held liable for the VAT in that Member State (see, to that effect, Teleos and Others, paragraphs 66 and 67, and Euro Tyre Holding, paragraph 38).
44 It is apparent from the order for reference that, in the case before the referring court, Mecsek-Gabona claims to be entitled to exemption from VAT on the basis of (i) the VAT identification number assigned to the purchaser by the Italian tax authority, (ii) the fact that the goods sold had been picked up by foreign-registered vehicles and (iii) the CMRs returned by the purchaser from its address, indicating that the goods had been transported to Italy.
45 The question whether, by acting in that manner, Mecsek-Gabona fulfilled its obligations relating to evidence and diligence is a matter for the referring court to assess in the light of the conditions specified in paragraph 38 above.
46 However, where the supply of goods concerned is part of a tax fraud committed by the purchaser and where the tax authority is not certain that the goods have actually left the territory of the Member State of supply, it is necessary to consider, thirdly, whether that authority may subsequently require the vendor to account for the VAT on that supply.
47 According to settled case-law, the prevention of tax evasion, avoidance and abuse is an objective recognised and encouraged by Directive 2006/112 (see Joined Cases C-487/01 and C-7/02 Gemeente Leusden and Holin Groep [2004] ECR I-5337, paragraph 76; R., paragraph 36; and Joined Cases C-80/11 and C-142/11 Mahagében and Dávid [2012] ECR, paragraph 41 and the case-law cited) which can, in certain circumstances, justify stringent requirements as regards vendors’ obligations (Teleos and Others, paragraphs 58 and 61).
48 Accordingly, it is not contrary to European Union law to require an operator to act in good faith and to take every step which could reasonably be asked of it to satisfy itself that the transaction which it is carrying out does not result in its participation in tax fraud (Teleos and Others, paragraph 65, and Mahagében and Dávid, paragraph 54).
49 The Court found those factors to be important for the purposes of deciding whether the vendor can be obliged to account for the VAT after the event (see, to that effect, Teleos and Others, paragraph 66).
50 Consequently, in the event that the purchaser in the case before the referring court has committed tax fraud, it is justifiable to make the vendor’s right to exemption from VAT conditional upon its good faith.
51 It is not immediately clear from the order for reference that Mecsek-Gabona knew or should have known that the purchaser had committed tax fraud.
52 However, in its written and oral submissions before the Court, the Hungarian Government claims that several factors not mentioned in the order for reference prove, in its opinion, that Mecsek-Gabona acted in bad faith. To that effect, the Hungarian Government argues that, even though Mecsek-Gabona was not familiar with the purchaser of the goods at issue in the main proceedings, it had not requested any guarantees from the purchaser; it did not check the purchaser’s VAT identification number until after the transaction; it did not collect any additional information on the purchaser; it had transferred the right to dispose of the goods as owner to the purchaser, while accepting that payment of the original sale price could be deferred; and it had presented the CMRs returned by the purchaser even though they were incomplete.
53 In that regard, it should be borne in mind that, in proceedings brought under Article 267 TFEU, the Court has no jurisdiction to check or to assess the factual circumstances of the case before the referring court. It is therefore for the national court to carry out an overall assessment of all the facts and circumstances of the case in order to establish whether Mecsek-Gabona had acted in good faith and taken every step which could reasonably be asked of it to satisfy itself that the transaction which it had carried out had not resulted in its participation in tax fraud.
54 If the referring court were to reach the conclusion that the taxable person concerned knew or should have known that the transaction which it had carried out was part of a tax fraud committed by the purchaser and that the taxable person had not taken every step which could reasonably be asked of it to prevent that fraud from being committed, there would be no entitlement to exemption from VAT.
55 In the light of all the foregoing considerations, the answer to Questions 1 and 2 is that Article 138(1) of Directive 2006/112 is to be interpreted as not precluding, in circumstances such as those of the case before the referring court, refusal to grant a vendor the right to the VAT exemption for an intra-Community supply, provided that it has been established, in the light of objective evidence, that the vendor has failed to fulfil its obligations as regards evidence, or that it knew or should have known that the transaction which it carried out was part of a tax fraud committed by the purchaser, and that it had not taken every reasonable step within its power to prevent its own participation in that fraud.
Question 3
56 By Question 3, the referring court asks, in essence, whether a vendor may be refused the VAT exemption for an intra-Community supply, in accordance with Article 138(1) of Directive 2006/112, on the ground that the tax authority of another Member State has removed the purchaser’s VAT identification number from the register, with retroactive effect from a date prior to the sale of the goods even though the number was removed after the goods had been supplied.
57 Under the transitional arrangements for tax applicable to trade within the European Union, the purpose of which is the transfer of the tax revenue to the Member State in which final consumption of the goods supplied takes place (see Teleos and Others, paragraph 36, and Joined Cases C-536/08 and C-539/08 X and fiscale eenheid Facet-Facet Trading [2010] ECR I-3581, paragraph 30), the identification of taxable persons subject to VAT by means of an individual number facilitates the determination of the Member State in which that final consumption takes place.
58 Under Article 214(1)(b) of Directive 2006/112, Member States are to take the measures necessary to ensure that every taxable person who makes intra-Community acquisitions is identified by means of an individual number. Under Article 226(4) of Directive 2006/112, on the other hand, the customer’s VAT identification number, under which the customer has received a supply of goods as referred to in Article 138 of that directive, must be indicated on the invoice, which itself must always be issued in respect of an intra-Community supply.
59 However, neither the wording of Article 138(1) of Directive 2006/112 nor the case-law cited in paragraph 31 above mentions – as one of the substantive conditions, listed exhaustively, for an intra-Community supply – the obligation to have a VAT identification number.
60 Admittedly, a VAT identification number provides proof of the tax status of the taxable person for the purposes of the application of VAT and facilitates the tax audit of intra-Community transactions. However, it constitutes a formal requirement which cannot undermine the right of exemption from VAT where the substantive conditions for an intra-Community supply are satisfied (see, by analogy, in relation to the right of deduction, Case C-385/09 Nidera Handelscompagnie [2010] ECR I-10385, paragraph 50, and Case C-438/09 Dankowski [2010] ECR I-14009, paragraphs 33 and 47).
61 According to the case-law, a national measure which, in essence, makes the right of exemption for an intra-Community supply conditional upon compliance with formal obligations, without any account being taken of the substantive requirements, goes further than is necessary to ensure the correct levying and collection of the tax (Collée, paragraph 29). The only exception is if non-compliance with such formal requirements would effectively prevent the production of conclusive evidence that the substantive requirements have been satisfied (see, to that effect, Collée, paragraph 31).
62 In the present case, it is common ground that the purchaser’s identification number was valid at the time of the transaction but that, several months later, that number was removed from the register of taxable persons by the Italian tax authority, with retroactive effect.
63 However, given that the obligation to check the status of the taxable person must be discharged by the competent national authority before it assigns that person a VAT identification number, possible irregularities affecting the register cannot deprive a trader who has relied on the information entered in that register of the right of exemption from VAT to which it is entitled.
64 As the European Commission rightly observes, it is contrary to the principle of proportionality that the vendor be held liable for the VAT solely on the ground that the purchaser’s VAT identification number was removed from the register with retroactive effect.
65 Accordingly, the answer to Question 3 is that a vendor may not be refused the VAT exemption for an intra-Community supply, in accordance with Article 138(1) of Directive 2006/112, solely on the ground that the tax authority of another Member State has removed the purchaser’s VAT identification number from the register, with retroactive effect from a date prior to the sale of the goods even though the number was removed after the goods had been supplied.