Intra-Community delivery for a client without valid VAT EU number

Polish administrative court has just recently stated that a company registered in Poland for VAT purposes cannot apply 0% VAT rate for the intra-Community delivery if they know that their customer is not registered for intra-Community transactions (the VAT number is not visible in the VAT Information and Exchange System VIES).  

Polish company registered for intra-Community transactions has made a delivery to a customer in Spain that has not been registered for intra-Community transactions. The Polish company has claimed they may apply 0% VAT rate based on the Judgment of the Court from September 27 2012 (C-587/10).  

Polish tax office has rejected the company’s standpoint as article 13 paragraph 2 and article 42 paragraph 1 point 1 from the Polish act on VAT clearly states than 0% VAT rate may applied only when customer’s VAT number is registered for intra-Community transactions. They have pointed out that the company has not shown any other evidence that their customer is acting as one registered for intra-Community transactions as it is stated in the above Judgment of the Court. 

The Polish administrative courts agreed with the Polish tax office. The VAT number of the buyer has to be registered for intra-Community transactions in order to apply 0% VAT rate and Judgment of the Court regarding C-587/10 is only applicable when the company has no knowledge that their customer is not registered for these transactions.  

This Polish court rulings and Council Directive 2018/1910 which came to force on January 1 2020,  clearly say that “the inclusion of the VAT identification number of the person acquiring the goods in the VAT Information Exchange System (VIES), assigned by a Member State other than that in which the transport of the goods begins, become, in addition to the condition of transport of the goods outside the Member State of supply, a substantive condition for the application of exemption rather than a formal requirement”. This means that the buyers’ VAT number has to be checked in VIES before the delivery is made or 0% VAT rate may not be applicable.  

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