Opinion of the Advocate General — ECLI:EU:C:2022:289
Date: 2022-04-07
Language of the case: Polish
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Poland

Translation C-696/20 – 1 
Case C-696/20 
Request for a preliminary ruling 
Date lodged: 
21 December 2020 
Referring court: 
Naczelny Sąd Administracyjny (Poland) 
Date of the decision to refer: 
30 June 2020 
Appellant on a point of law: 
B. 
Respondent in the appeal on a point of law: 
Dyrektor Izby Skarbowej w. 
  
DECISION  
30 June 2020,  
the Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland) […] 
[…] 
having examined on 30 June 2020 
at a hearing before the Izba Finansowa (Finance Chamber) 
the appeal on a point of law brought by B., established in H., 
against the judgment of the Wojewódzki Sąd Administracyjny w Warszawie 
(Regional Administrative Court in Warsaw, Poland) 
of 16 May 2017 […] 
in the action brought by B., established in H., 
EN 
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against the decision of the Dyrektor Izby Skarbowej (Director of the Tax 
Chamber) in W. 
of 11 September 2015, No […] 
concerning the determination of the VAT difference to be refunded for April 
2012, 
decides: 
(1) pursuant to Article 267 of the Treaty on the Functioning of the 
European Union […], to refer the following question to the Court of Justice 
of the European Union for a preliminary ruling: 
Do Article 41 of Council Directive 2006/112/EC of 28 November 2006 on the 
common system of value added tax […] and the principles of proportionality 
and neutrality preclude the application, in a situation such as that at issue in 
the main proceedings, of a national provision such as Article 25(2) of the 
ustawa z dnia 11 marca 2004 r. o [Or. 2] podatku od towarów i usług (Law of 
11 March 2004 on Value Added Tax) […] to an intra-Community acquisition 
of goods by a taxable person 
- if that acquisition has already been taxed in the territory of the 
Member State in which dispatch ends, by the persons acquiring the goods 
from that taxable person 
- where it has been established that the taxable person’s actions did not 
involve any tax fraud, but that they were the result of an incorrect 
designation of supplies in chain transactions and that that taxable person’s 
Polish VAT identification number was provided for the purposes of a 
domestic rather than an intra-Community supply?  
(2) […] to stay the proceedings until such time as the above question 
referred for a preliminary ruling has been answered. [Or. 3] 
GROUNDS 
I. Legal framework 
EU law 
1. Provisions of Council Directive 2006/112/EC of 28 November 2006 on the 
common system of value added tax […]: 
Article 40 
The place of an intra-Community acquisition of goods shall be deemed to be the 
place where dispatch or transport of the goods to the person acquiring them ends. 
DIRECTOR OF THE TAX CHAMBER IN W. 
 
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Article 41 
Without prejudice to Article 40, the place of an intra-Community acquisition of 
goods as referred to in Article 2(1)(b)(i) shall be deemed to be within the territory 
of the Member State which issued the VAT identification number under which the 
person acquiring the goods made the acquisition, unless the person acquiring the 
goods establishes that VAT has been applied to that acquisition in accordance 
with Article 40. 
If VAT is applied to the acquisition in accordance with the first paragraph and 
subsequently applied, pursuant to Article 40, to the acquisition in the Member 
State in which dispatch or transport of the goods ends, the taxable amount shall be 
reduced accordingly in the Member State which issued the VAT identification 
number under which the person acquiring the goods made the acquisition. 
National law 
1. Provisions of the Law of 11 March 2004 on Value Added Tax ([…], ‘the 
Law on VAT’): 
Article 25 
1. An intra-Community acquisition of goods shall be deemed to have been 
made in the territory of the Member State in which the goods are located at the 
time when their dispatch or transport ends. 
[Or. 4] 
2. Notwithstanding paragraph 1, where the person acquiring the goods referred 
to in Article 9(2), in making an intra-Community acquisition of goods, has 
provided the number assigned to him by the Member State concerned for the 
purposes of intra-Community transactions other than the Member State in which 
the goods are located at the time when their dispatch or transport ends, the intra-
Community acquisition of goods shall also be deemed to have been made in the 
territory of that Member State, unless the person acquiring the goods demonstrates 
that the intra-Community acquisition of goods: 
(1) has been taxed in the territory of the Member State in which the goods are 
located at the time when their dispatch or transport ends; or 
(2) is deemed to have been taxed in the territory of the Member State in which 
the goods are located at the time when their dispatch or transport ends due to the 
application of the simplified intra-Community triangular transaction procedure 
referred to in Chapter XII. 
II. Facts of the case 
Proceedings before the tax authorities 
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1 By decision of 11 June 2015, the Dyrektor Urzędu Kontroli Skarbowej (Director 
of the Tax Audit Office) in R. determined the VAT difference to be refunded for 
April 2012 with respect to the appellant company B., established in R. (‘the 
Company’). The authority established that the Company, as a VAT-taxable person 
registered in Poland, participated in chain transactions concerning the same goods, 
which were concluded by at least three operators. Those transactions resulted in 
the direct transfer (transport) of goods from the first operator to the last operator in 
the supply chain. The Company acted as an intermediary between the supplier and 
the recipient. In Poland, the Company purchased goods exclusively from B., 
established in P. (‘BOP’). The transactions in which the Company participated 
followed one of two schemes: 
- Scheme I: BOP with a Polish VAT number –> the Company with a Polish 
VAT number –> an EU operator with an EU VAT number 
- Scheme II: BOP with a Polish VAT number –>the Company with a Polish 
VAT number –> the first EU operator/customer with an EU VAT number –> the 
second EU operator/recipient with an EU VAT number 
The Company recognised supplies from BOP as domestic supplies which were 
subject to 23% VAT. On the other hand, the Company classified its supplies to the 
EU recipients as intra-Community supplies of goods with a 0% VAT rate, which 
resulted in it receiving tax refunds. After analysing the terms and nature [Or. 5] of 
the supplies and the organisation of transport, the authority found that the 
Company had incorrectly recognised the supply involving transport in the supply 
chain. As a result, the authority redefined the above supply chain by establishing 
that the ‘supply involving transport’ was the first one – between BOP and the 
Company – which it interpreted as an intra-Community supply of goods on the 
part of BOP and as an intra-Community acquisition of goods on the part of the 
Company. 
Thus, the authority considered the actions of the Company which treated supplies 
to its counterparties from Member States as intra-Community supplies of goods 
subject to 0% VAT to be incorrect. The authority found that those transactions 
should be taxed in the territory of the Member States of destination of the goods 
(outside Poland). The authority pointed out that, to that end, the Company should 
have registered in the territory of the Member States of destination of the goods 
and settled the relevant intra-Community acquisitions there. Subsequent sales of 
goods within that chain to counterparties from those Member States should, on the 
other hand, have been taxed as supplies within the Member States of destination 
of the goods, in accordance with the rules applicable there. The authority stated 
that, as a result of the incorrect recognition of the supply involving transport and 
at the same time the incorrect recognition of the intra-Community supply of 
goods, the value of intra-Community supplies in the register maintained by the 
Company had been overstated. 
DIRECTOR OF THE TAX CHAMBER IN W. 
 
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Moreover, the authority pointed out that, as a result of the supplies effected by 
BOP (the first operator in the supply chain) to the Company being interpreted as 
supplies involving transport, the Company would not only be obliged to settle 
those supplies in the Member State of destination of the goods, but additionally 
Article 25(2)(1) of the Law on VAT would be applicable; since in connection with 
the intra-Community acquisition of goods the Company had provided the Polish 
EU VAT number, which was a number issued by a Member State other than the 
Member State in which transport of the goods ended, it was obliged to settle VAT 
in Poland pursuant to Article 25(2)(1) of the Law on VAT. 
2 By its decision of 11 September 2015, the Director of the Tax Chamber in W. 
annulled the decision of the authority of first instance in its entirety and 
determined a slightly higher amount of the VAT difference to be refunded for 
April 2012. This change in the outcome was irrelevant to the question referred, 
since in principle the authority of second instance confirmed all the factual and 
legal findings of the authority of first instance. 
Importantly, it should be noted that none of the authorities found that the 
transactions in which the Company had participated involved tax fraud. The 
transactions within [Or. 6] the supply chain were subject to VAT, and tax was 
paid at each stage. In essence, the authorities’ position is that the Company taxed 
them incorrectly, however, by failing properly to recognise the nature of 
individual transactions. 
3 The authority of second instance confirmed as correct the position that the 
Company was subject to the provision of Article 25(2)(1) of the Law on VAT, 
since, in connection with the acquisition of goods from BOP, it had provided a 
Polish VAT number, which was a number issued by a Member State other than 
the Member State in which transport of the goods ended. The authority considered 
that such an action created an obligation on the part of the Company to settle the 
tax in Poland, since it had failed to demonstrate that it had taxed the acquisition of 
goods in the territory of the Member State in which dispatch or transport ended. 
Judgment at first instance 
4 The Company appealed against the decision of the authority of second instance 
before the Wojewódzki Sąd Administracyjny w Warszawie (Regional 
Administrative Court in Warsaw, Poland), which, in its judgment of 16 May 2017, 
[…] dismissed the action, declaring its claims to be unfounded. 
The Regional Administrative Court shared the position of the authorities that the 
Company had incorrectly identified the transactions in the supply chain, including 
the transaction which should have been considered to involve transport. The court 
thus accepted the finding that the transaction between BOP and the Company (the 
first transaction in the supply chain) was an intra-Community supply of goods 
(rather than a domestic purchase subject to 23% VAT as recognised by the 
Company), and transactions between the Company and the recipients were 
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transactions made outside the territory of Poland (the Company treated them as 
intra-Community supplies of goods subject to 0% VAT), which the Company was 
obliged to recognise as intra-Community acquisitions of goods. At the same time, 
the court accepted the unchallenged finding that the persons which had acquired 
goods from the Company had recognised the intra-Community acquisitions of 
goods in the Member State in which dispatch ended and that there was no loss of 
VAT income. 
The court confirmed that Article 25(2)(2) of the Law on VAT applied to the 
Company. It stated that, as a result of the authorities verifying the nature of the 
relevant supplies, the Company, as a taxable person performing the intra-
Community acquisition of goods which provided an identification number 
different from the number issued by the Member State in which transport of the 
goods ended, should be deemed to have caused goods to be acquired in two 
places – in the Member State in which transport ended and in the Member State of 
its registration. Since the Company had failed to demonstrate that it had itself 
taxed the acquisition of goods in the Member State in which transport ended 
[Or. 7] (it was taxed by the recipients), the intra-Community acquisition of goods 
was deemed to have been carried out in Poland pursuant to Article 25(2) of the 
Law on VAT. 
5 As regards the background of the case, it should also be noted that the tax charged 
to the Company in connection with the intra-Community acquisition of goods in 
Poland was not the only disputed issue. As a result of the authorities verifying the 
transactions in the supply chain, the Company’s right to deduct input VAT paid on 
the invoices for its acquisition of goods from BOP, which transaction was treated 
by both operators as a domestic supply, was also challenged. When reclassifying 
those transactions as intra-Community supplies of goods, the authorities decided 
that the Company had no right to deduct the VAT incorrectly shown on the 
relevant invoices. At the same time, however, they took the position that the issuer 
of those invoices was obliged to charge 23% VAT, as the Company had used the 
Polish VAT number for those transactions. The above problem is not covered by 
the question referred, but it should be mentioned that the interpretation adopted 
and the application of the law in the case at issue resulted in the Company being 
charged 46% VAT in total. 
Proceedings before the Supreme Administrative Court 
6 The Company appealed against the above judgment in its entirety, claiming that 
the court of first instance had infringed, inter alia, the following laws: 
- Article 25(2)(1), read in conjunction with Article 25(1), of the Law on VAT, 
by their incorrect application consisting in the assumption that the condition for 
the application of Article 25(2) of the Law on VAT was met in a domestic 
situation (that is to say, where transport starts in the Member State which issued 
the VAT number shown on the invoices), whereas this is a provision which can be 
applied only to intra-Community transactions; 
DIRECTOR OF THE TAX CHAMBER IN W. 
 
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- Article 25(2) of the Law on VAT and Article 41 of Directive 2006/112, read 
in conjunction with Article 16 of Council Implementing Regulation (EU) 
No 282/2011, by incorrectly finding that Article 25(2) of the Law on VAT may be 
applied to situations in which a transaction has already been taxed as a supply of 
goods in the territory of Poland; 
- Article 25(2)(1) of the Law on VAT, by its incorrect interpretation 
consisting in the erroneous view that this provision may be applied where supplies 
have been taxed in the Member State in which transport of the goods ended 
(including by a person other than the customer referred to in Article 25(2)(1) of 
the Law on VAT). 
[Or. 8] 
III. Grounds for the request for a preliminary ruling by the national court 
(Supreme Administrative Court) 
7 In order for the Supreme Administrative Court to decide on some of the claims put 
forward by the Company in its appeal on a point of law, input is required from the 
Court of Justice of the European Union on the interpretation and application of 
Article 41 of Directive 2006/112/EC in the context of the principles of 
proportionality and neutrality. […] [Reference to Article 267 TFEU] 
III. The question referred for a preliminary ruling 
8 The analysis of the evidence gathered in the course of the tax proceedings in the 
case indicates that the finding of the authorities and of the court of first instance 
that the Company incorrectly recognised the nature of the supplies in which it 
participated should be accepted as correct; the supply involving transport was in 
fact the one performed between BOP and the Company, and thus it constituted an 
intra-Community supply of goods. The Company itself did not challenge this 
finding in the proceedings, but it rejected the conclusions as to the manner of 
taxation of the transactions reclassified in this manner. 
9 The consequence of accepting the above findings is that VAT is charged to the 
Company on the basis of Article 25(1) and Article 25(2)(1) of the Law on VAT, 
which implement Article 41 of Directive 2006/112 in national legislation. 
Article 41 refers to the ‘VAT identification number under which the person 
acquiring the goods made the [intra-Community] acquisition’; the corresponding 
Polish rule refers to a situation in which the person acquiring the goods has 
indicated on the invoice a VAT number other than that of the Member State in 
which dispatch or transport ends ‘in connection with the intra-Community 
acquisition of goods’. The problem in this case lies in the fact that the Company, 
by providing a Polish VAT number on the invoice, did not do so for the purposes 
of an intra-Community acquisition transaction, but for the purposes of a domestic 
transaction, since it treated the acquisition of goods from BOP as such. Even if it 
is considered that this subjective element of the Company’s motivation does not 
affect the application of the aforementioned provisions, the consequences of this 
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error must be assessed. In the case, it has not been established that the actions of 
the Company or its counterparties amounted to fraud or abuse. According to their 
original classification, the transactions were correctly taxed [Or. 9]. 
10 There is no doubt that the purpose of introducing provisions such as Article 41 of 
Directive 2006/112 (formerly Article 28(b)(A) of the Sixth Directive) was to 
prevent tax fraud. The intention was to eliminate tax evasion in a situation where, 
at the time of purchase, the person acquiring the goods is not certain in which 
Member State dispatch or transport will end. This rule also makes it possible to 
eliminate cases of non-taxation where the person acquiring the goods has no VAT 
identification number in the country in which dispatch or transport ends but has 
one in another Member State. As a result, the common VAT system is made 
complete without the risk that the transaction will not be taxable at a certain stage. 
11 At the same time, the obligation to tax an intra-Community acquisition of goods in 
the Member State in which the VAT identification number provided by the person 
acquiring the goods was issued, while maintaining the principle of taxation in the 
Member State in which transport of the goods ends, means that the same 
transaction, namely the intra-Community acquisition of goods, may be taxed in 
two different Member States. This is prevented by the ability of the person 
acquiring the goods to demonstrate that the transaction has been taxed in 
accordance with Article 40, that is to say, in the Member State in which transport 
ends. 
12 In the case at issue, it remains undisputed that the analysed transactions were 
taxed in the Member State in which transport ended, yet this was not done by the 
Company, which did not treat them as intra-Community acquisitions of goods, but 
rather by the recipients. The fact that the authorities which conducted the 
proceedings in this case had no competence to verify the entire supply chain in 
order to ensure correct taxation and confined themselves to examining only part of 
it results in the infringement of not just the VAT-neutrality principle but also of 
the proportionality principle. The Company’s inability to account in its settlement 
of intra-Community acquisitions for the tax paid by its counterparties in the 
Member State in which transport ended (taking into account that the tax obligation 
concerns the year 2012) will result in a disproportionate tax burden. 
13 These doubts, which are related to the interpretation of Article 41 of 2006/112/EC 
in conjunction with the principles of neutrality and proportionality, justify a 
request to the Court of Justice of the European Union for a preliminary ruling 
[Or. 10] 
14 In connection with the question referred for a preliminary ruling, the Supreme 
Administrative Court has stayed the proceedings in the appeal on a point of law 
pursuant to Article 124(1)(5) of the Prawo o postępowaniu przed sądami 
administracyjnymi (Law on Proceedings before the Administrative Courts).