Judgment;Summary — ECLI:EU:C:2019:876
Date: 2019-10-17
Language of the case: Polish
Court formation: Tenth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Poland

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date of receipt: 
17 October 2018 
Referring court: 
Naczelny Sąd Administracyjny (Poland) 
Date of issue of the decision on the request for a preliminary ruling: 
19 June 2018 
Appellant: 
Unitel Sp. z o.o. w Warszawie 
Respondent: 
Dyrektor Izby Skarbowej w Warszawie 
  
Subject matter of the case in the main proceedings and legal basis of the 
request 
Disputed delivery of goods dispatched outside the territory of the European Union 
in a case where the person actually acquiring the goods is an entity other than that 
indicated on the invoice. Refusal to exempt from VAT with the right to deduct (at 
the 0% rate). 
Article 267 TFEU 
Questions referred 
1. In the light of Article 146(1)(a) and (b) and Article 131 of Council Directive 
2006/112/EC of 28 November 2006 on the common system of value added 
tax (OJ 2006 L 347, p. 1, as amended; ‘Directive 2006/112/EC’) and of the 
principles of taxation of consumption, neutrality and proportionality, should 
the correct national practice be to apply an exemption with the right to 
deduct (which in Poland means application of a 0% rate) in each case where 
both of the following conditions are met: 
EN 
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(a) the goods have been exported to an unidentified recipient outside the 
European Union; and 
(b) there is clear evidence that the goods have left the territory of the 
European Union, and this is not disputed? 
2. Do the provisions of Article 146(1)(a) and (b) and Article 131 of Directive 
2006/112/EC and the principles of taxation of consumption, neutrality and 
proportionality preclude a national practice whereby it is assumed that no 
supply of goods has taken place in the case where the goods have been 
indubitably exported outside the territory of the European Union, and 
following their exportation the tax authorities establish in the course of their 
investigation that the person actually acquiring the goods was not the entity 
to whom the taxable person issued the invoice documenting the supply, but 
was another entity unidentified by the authorities, as a result of which the 
authorities refuse to exempt such a transaction from tax with the right to 
deduct (which in Poland means application of a 0% rate)? 
3. In the light of Article 146(1)(a) and (b) and Article 131 of Directive 
2006/112/EC and of the principles of taxation of consumption, neutrality 
and proportionality, should the correct national practice be to apply the 
domestic rate to the supply of goods where there is clear evidence that the 
goods have left the territory of the European Union, but the authorities, in 
the absence of an identified recipient, conclude that no supply of goods has 
taken place, or should it rather be assumed that no taxable transaction for 
VAT purposes has taken place at all in those circumstances and therefore 
that the taxable person is not entitled to deduct input VAT on the purchase 
of the exported goods under Article 168 of Directive 2006/112/EC? 
Applicable provisions of EU law 
Council Directive 2006/112/EC of 28 November 2006 on the common system of 
value added tax: 
Articles 14, 131, 146(1)(a) and (b) 
Applicable provisions of national law 
Ustawa o podatku od towarów i usług (Law on the Tax on Goods and Services) of 
11 March 2004 (Journal of Laws [Dz. U.] of 2011, No 177, item 1054, as 
amended; ‘the Law on VAT’): 
Article 2(8): For the purposes of the following provisions:  
… 
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‘export of goods’ shall mean a supply of goods dispatched or transported outside 
the territory of the European Union from the national territory: 
(a) by or on behalf of the supplier; or 
(b) by or on behalf of a person acquiring the goods who is established outside 
the territory of the country, with the exception of goods exported by a person 
acquiring the goods himself for the equipping or provisioning of pleasure boats 
and private aircraft or any other means of transport for private use 
– if the export of the goods outside the territory of the European Union is 
confirmed by the competent customs authority stipulated in the customs 
regulations. 
Article 41(4): The tax rate applicable to the export of goods referred to in 
Article 2(8)(a) shall be 0%. 
Article 41(6): The tax rate of 0% shall apply to the export of goods referred to in 
paragraphs 4 and 5 provided that before the expiry of the deadline for filing a tax 
return for the tax period in question the taxable person has received the document 
confirming the export of goods outside the territory of the European Union. 
First sentence of Article 41(11): The provisions of paragraphs 4 and 5 shall 
apply mutatis mutandis to the export of goods referred to in Article 2(8)(b) if the 
taxable person, before the expiry of the deadline for filing a tax return for the tax 
period in which the supply of goods was made, has received the document 
referred to in paragraph 6 which states the identity of the goods that were supplied 
and exported. 
Presentation of the facts and procedure and the main arguments of the 
parties to the proceedings before the national court 
1 The Dyrektor Izby Skarbowej w Warszawie (Director of the Tax Chamber in 
Warsaw), in his decision of 29 August 2014, upheld the decision of the Dyrektor 
Urzędu Kontroli Skarbowej w Warszawie (Director of the Tax Audit Office in 
Warsaw) of 26 March 2014, which concerned the settlement of the goods and 
services tax (VAT) of Unitel Sp. z o.o. with its registered office in Warsaw (‘the 
Appellant’ or ‘the Company’) for the months from January to May 2007. 
2 As a result of the audit carried out with respect to the Appellant, whose business 
was the sale of mobile phones in the period from January to May 2007, the 
settlement of VAT related to the transactions conducted by the Appellant with the 
Ukrainian entities AJWA O.O.O. (‘A.’) and Mikhail Gavriliv (‘M.G.’) was 
challenged. The Director of the Tax Chamber confirmed the findings of the first-
instance authority, which indicated that no sales to the aforementioned entities had 
in fact taken place. An analysis of the Appellant’s documents (VAT invoices and 
Single Administrative Documents) demonstrated that mobile phones had in fact 
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been exported outside the territory of the European Union; however, no supply of 
goods took place between the Appellant and the aforementioned contracting 
parties, and thus no export of goods occurred in the present case within the 
meaning of Article 2(8) of the Law on VAT, with the result that the Appellant did 
not have the right to apply the 0% VAT rate pursuant to Article 41(4) of the Law 
on VAT. 
3 In its appeal to the Wojewódzki Sąd Administracyjny w Warszawie (Regional 
Administrative Court in Warsaw, Poland), the Appellant sought the annulment of 
the contested decision and of the decision of the first-instance authority. 
4 The Regional Administrative Court found no grounds to uphold the appeal. 
5 The findings concerning the transactions documented by the VAT invoices issued 
to A. indicated, according to that court, that it was a fictitious company whose 
purpose was to conceal the actual recipient of the phones, and was also used to 
perpetrate tax fraud against both the Polish and Ukrainian tax authorities. On the 
other hand, the findings concerning the transactions documented by the VAT 
invoices issued to M.G. indicated that he was not the trader who acquired the 
phones in question from the Appellant. 
6 In connection with the foregoing, the Regional Administrative Court found that 
where goods are exported from Poland to an unidentified recipient outside the 
territory of the European Union, no supply of goods takes place within the 
meaning of Article 7(1)(1) to (4) of the Law on VAT, and therefore this 
transaction cannot be considered to be an export of goods within the meaning of 
Article 2(8) of the aforementioned Law. 
7 In addition, the Regional Administrative Court noted that it could not be 
concluded that the Appellant had exercised due diligence when conducting the 
transactions in question. 
8 The Company appealed against the above judgment in its entirety to the Naczelny 
Sąd Administracyjny (Supreme Administrative Court, Poland), requesting that the 
contested judgment be set aside or that a question of law be referred to the Court 
of Justice. 
Brief statement of and reasons for the reference 
9 Directive 2006/112/EC adopted a model for taxing international transactions 
based on the taxation of goods at the place of their destination (consumption). In 
that case, in the country from which goods are exported, a tax exemption (or a 0% 
rate) is applied and taxation occurs in the country into which those goods are 
imported. The adoption of these rules means that the goods are effectively taxed in 
the country in which they are consumed. 
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10 Additionally, in the country from which the goods are exported, the taxable person 
who benefits from the exemption (0% rate) has the right to deduct input tax 
pursuant to Article 169 of the directive. 
11 Directive 2006/112/EC does not specifically regulate the conditions for exempting 
the export of goods; it provides only for the obligation to exempt such a 
transaction from the common system of value added tax and defines two types of 
exempted exports of goods, namely, direct exports (Article 146(1)(a)) and indirect 
exports (Article 146(1)(b)). This exemption is obligatory. However, broad 
procedural autonomy related to the implementation of this obligation is granted to 
the Member States, which may make the application of such an exemption subject 
to certain conditions laid down in national law. Nevertheless, the restrictions 
introduced must pursue the objectives set out in Article 131 of the directive, 
namely, to ensure the correct and straightforward application of this exemption 
and to prevent any possible evasion, avoidance or abuse. 
12 Under national law, the conditions which must be met in order for a transaction to 
be considered an export of goods are listed in Article 2(8) of the Law on VAT. 
13 In fact, the first two questions to the Court of Justice concern what is meant by 
‘supply’ under Article 146(1)(a) and (b) of Directive 2006/112/EC, since these 
provisions, which determine exemptions for transactions involving exports of 
goods, do not use the concept of ‘exports of goods’. This concept is not referred to 
in any other provision of the directive, nor did the Sixth Directive provide for any 
definitions in this regard. 
14 Pursuant to Article 146(1) of Directive 2006/112/EC, the following transactions 
are exempt from VAT: 
(a) the supply of goods dispatched or transported to a destination outside the 
[European Union] by or on behalf of the vendor; 
(b) the supply of goods dispatched or transported to a destination outside the 
[European Union] by or on behalf of a customer not established within their 
respective territory. 
15 Referring to the term ‘supply’ used in this provision (and also used in Article 2(8) 
of the Law on VAT), the national tax authorities, as in the present case, assume 
that the concept of supply in this instance must be understood in the terms of 
Article 7(1) of the Law on VAT (Article 14(1) of the directive), which means that 
the supply of goods is the transfer of the right to dispose of tangible property as 
owner. According to the tax authorities, this means that both parties to the legal 
relationship under which the supply of goods takes place must exist and must be 
properly indicated. As a consequence, as was accepted in the present case, the 
export of goods cannot be found to have taken place and thus the preferential 0% 
tax rate cannot be applied if the person acquiring the goods indicated on the 
invoice or in the customs documents is a fictitious entity. 
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16 This point of view is also shared in most national administrative court case-law. 
17 However, serious doubt arises as to whether, in a case where the export of goods 
is not in dispute (as it is confirmed by the customs authorities), the entity indicated 
on the supplier’s invoice and in the customs documents must be the same as the 
actual person acquiring the goods, who has not been identified, in order for the 
transaction in question to be considered a supply of goods outside the territory of 
the European Union. In such a situation, is not the right to dispose of tangible 
property as owner in fact transferred within the meaning of Article 14(1) of 
Directive 2006/112/EC? 
18 It should be recalled that, in its judgment of 5 October 2016 in Maya Marinova 
ET, C-576/15, the Court of Justice of the European Union found that 
Article 2(1)(a), Article 9(1), Article 14(1) and Articles 73 and 273 of Directive 
2006/112/EC and the principles of fiscal neutrality and proportionality must be 
interpreted as not precluding national legislation, such as that at issue in the main 
proceedings, under which, where goods are not in the warehouse of the taxable 
person to whom they have been supplied and the tax documents of relevance to 
those goods have not been recorded in the accounts of that taxable person, tax 
authorities may presume that the taxable person subsequently sold those goods to 
third parties and determine the taxable amount of the sale of those goods 
according to the factual information at hand pursuant to rules not provided for in 
that directive. 
19 This indicates that the Court of Justice admits such an interpretation of 
Article 14(1) of Directive 2006/112/EC under which a taxable supply is also the 
transfer of the right to dispose of tangible property as owner to an unidentified 
recipient, since the fact that it has been established that the goods are not in the 
taxable person’s warehouse already gives rise to a presumption that the taxable 
person has subsequently sold those goods to unidentified third parties, which 
means that he has carried out a taxable supply of those goods, which in turn 
requires that the taxable amount be determined in a manner permitted by that 
judgment. 
20 Obviously, the Court noted in that judgment that fraudulent acts on the part of a 
taxable person, such as concealing supplies and revenue, must not hinder the 
collection of VAT, but it was of course not such circumstances (fraud) that caused 
the Court to consider that there were objective grounds for determining that a 
supply of goods has taken place even if the person acquiring the goods has not 
been identified. 
21 As the Court has repeatedly held, transactions must be taxed on the basis of their 
objective characteristics (see, in particular, the judgments of 12 January 2006, 
Optigen and Others, C-354/03, C-355/03 and C-484/03, EU:C:2006:16, 
paragraph 44, and of 6 July 2006, Kittel and Recolta Recycling, C-439/04 and 
C-440/04, EU:C:2006:446, paragraph 41). 
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22 In its judgment of 19 December 2013, BDV Hungary Trading Kft., C-563/12, the 
Court stated in paragraph 40: ‘In circumstances where the conditions for export 
exemption laid down in Article 146(1)(b) of Directive 2006/112, in particular, the 
requirement that the goods concerned leave the customs territory of the European 
Union, are satisfied, no liability to pay VAT arises in respect of such a supply 
(see, by analogy, Collée, paragraph 30 and the case-law cited). In those 
circumstances, there no longer exists, in principle, a risk of tax evasion or loss of 
tax which could justify the transaction concerned being taxed.’ 
23 In this context, the question arises as to whether possible fraud, which takes place 
in the territory of a third country with respect to the fact that the goods exported 
from the European Union have been received by an entity other than that indicated 
on the export documents, affects the applicability of the exemption with the right 
to deduct (which in Poland means application of the 0% rate) in connection with 
the supply of such goods. 
24 It is apparent from the settled case-law of the Court of Justice concerning intra-
Community transactions (see, for instance, Albert Collée, C-146/05, paragraph 26) 
that ‘the measures which the Member States may adopt under Article 22(8) of the 
Sixth Directive in order to ensure the correct levying and collection of the tax and 
for the prevention of fraud must not go further than is necessary to attain such 
objectives (see Joined Cases C-110/98 to C-147/98 Gabalfrisa and Others [2000] 
ECR I-1577, paragraph 52, and the order of 3 March 2004 in Case C-395/02 
Transport Service [2004] ECR I-1991, paragraph 29). Those measures may not 
therefore be used in such a way as to have the effect of undermining the neutrality 
of VAT, which is a fundamental principle of the common system of VAT 
established by the relevant Community legislation (see Case C-454/98 Schmeink 
& Cofreth and Strobel [2000] ECR I-6973, paragraph 59, and Case C-255/02 
Halifax and Others [2006] ECR I-1609, paragraph 92).’ 
25 From the judgments of the Court of Justice it follows, first of all, that national 
measures which in essence make the right of exemption (0% rate) subject to 
compliance with formal obligations, without any account being taken of the 
substantive requirements and, in particular, without any consideration being given 
as to whether those requirements have been satisfied, go further than is necessary 
to ensure the correct levying and collection of the tax. This is because transactions 
should be taxed on the basis of their objective characteristics. Therefore, where 
there is no dispute about the fact that an intra-Community supply or export was 
made, the principle of fiscal neutrality requires that an exemption from VAT be 
allowed if the substantive requirements are satisfied, even if the taxable person 
has failed to comply with some of the formal requirements. 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 (cf., for instance, the judgment of the Court of 27 September 2007, 
Teleos plc and Others, C-409/04, and Albert Collée, C-146/05, and also indirectly 
Twoh International BV, C-184/05). 
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26 In its judgment of 18 December 2014, Schoenimport and Others, C-131/13, 
C-163/13 and C-164/13, the Court of Justice ruled, inter alia: 
‘42. … preventing possible tax evasion, avoidance and abuse is an objective 
recognised and encouraged by the Sixth Directive (see, inter alia, judgments in 
Halifax and Others, C-255/02, EU:C:2006:121, paragraph 71; Kittel and Recolta 
Recycling, C-439/04 and C-440/04, EU:C:2006:446, paragraph 54; and 
Mahagében and Dávid, C-80/11 and C-142/11, EU:C:2012:373, paragraph 41). 
43. In this connection, the Court has repeatedly held that EU law cannot be relied 
on by individuals for abusive or fraudulent ends (see, inter alia, judgments in 
Kittel and Recolta Recycling, EU:C:2006:446, paragraph 54; Fini H, C-32/03, 
EU:C:2005:128, paragraph 32; and Maks Pen, C-18/13, EU:C:2014:69, 
paragraph 26). … 
49. … it is, in principle, the responsibility of the national authorities and courts to 
refuse the benefit of the rights laid down by the Sixth Directive when they are 
claimed fraudulently or abusively, irrespective of whether those rights are rights to 
a deduction, to an exemption or to a VAT refund in respect of intra-Community 
supplies, as at issue in the case in the main proceedings. 
50. It must further be noted that, according to settled case-law, that is the position 
not only where tax evasion has been carried out by the taxable person itself but 
also where a taxable person knew, or should have known, that, by the transaction 
concerned, it was participating in a transaction involving evasion of VAT carried 
out by the supplier or by another trader acting upstream or downstream in the 
supply chain (see to that effect, inter alia, judgments in Kittel and Recolta 
Recycling, EU:C:2006:446, paragraphs 45, 46, 56 and 60, and Bonik, [C-285/11], 
EU:C:2012:774, paragraphs 38 to 40).’ 
27 The foregoing statements by the Court of Justice, which indicate, inter alia, the 
need to protect the European Union’s internal market, are clear and unambiguous 
in relation to intra-Community transactions, but a question arises as to their 
applicability to a situation such as that in the present case, in other words 
where — as stated in the judgment of the Court of 19 December 2013, BDV 
Hungary Trading Kft., C-563/12 — there no longer exists, in principle, a risk of 
tax evasion or loss of tax within the territory of the European Union. 
28 Thus, to what extent may national tax authorities, acting in the interest of the 
national Treasury and also to protect the interests of the EU market, taking into 
account the principles of taxation of consumption, neutrality and proportionality, 
penalise domestic taxable persons in connection with a finding of tax fraud (the 
receipt of goods by an unidentified entity) in the territory of a third country 
(export and consumption of goods)? 
29 In this context, another issue arises as well: in such a case, is the ability to take 
advantage of an exemption with the right to deduction affected by the domestic 
supplier’s awareness of such fraud or lack thereof? 
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30 In the Company’s opinion, making taxable persons liable for the integrity of their 
contracting parties even where the irregular actions of those contracting parties do 
not jeopardise the European Union’s internal market constitutes excessive 
interference with the principle of proportionality, and the fact that the taxable 
person in question is made to bear the economic burden of paying the tax on 
consumption which occurs in the territory of a third country where the goods in 
question are consumed by an entity from that third country constitutes a far-
reaching infringement of the principle of VAT neutrality and of the principle of 
taxing consumption where it takes place. 
31 Therefore, in the Appellant’s view, the correct practice should be limited 
exclusively to requiring taxable persons to demonstrate that they have exported 
goods outside the territory of the European Union, as this is the basis for 
determining that consumption — as a result of the supply made — will not occur 
within the territory of the European Union. 
32 The third question is whether, in the light of Article 146(1)(a) and (b) and 
Article 131 of Directive 2006/112/EC and of the principles of taxation of 
consumption, neutrality and proportionality, the correct national practice is for the 
tax authorities to challenge the taxable person’s right to take advantage of an 
exemption with the right to deduction (which means a rate of 0% in Poland) on 
the ground that a condition for the supply of goods, namely, the transfer of the 
right to dispose of tangible property as owner within the meaning of Article 14(1) 
of Directive 2006/112/EC, has not been met owing to the fact that the recipient of 
goods has not been identified, and to tax the transaction in question as a domestic 
supply (at a rate of 23%). 
33 Leaving aside the disputed issue of whether the absence of an identified recipient 
of the goods in a third country, in the case where it is not disputed that the goods 
in question were exported to that country, constitutes a ground for considering that 
no supply of goods has taken place, the point should be made that if such a finding 
is made by the tax authority (that no supply of goods has taken place), this should 
in principle result in the acceptance that such an export of goods is not subject to 
VAT. 
34 In such a case, it would appear more reasonable to assume that, if the goods were 
not used for the purposes of the taxable person’s taxable transactions (or 
transactions benefiting from an exemption with the right to deduction — 
Article 169 of Directive 2006/112/EC) under Article 168 (and also Article 169) of 
Directive 2006/112/EC, that taxable person is not entitled to deduct the amounts 
of tax which he was obliged to pay on their acquisition rather than, as is the 
practice of the national tax authorities, to tax such exports of goods outside the 
territory of the European Union as domestic supplies. 
35 As has already been stated, transactions should be taxed on the basis of their 
objective characteristics, and therefore a given transaction cannot be treated as not 
constituting a supply of goods (as a result of these goods having been exported 
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outside the territory of the European Union) and be taxed as such a (domestic) 
supply at the same time.