Judgment;Summary — ECLI:EU:C:2024:186
Date: 2024-02-29
Language of the case: Czech
Court formation: Tenth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Czechia

Translation C-676/22 – 1 
Case C-676/22 
Request for a preliminary ruling  
Date lodged:  
2 November 2022 
Referring court:  
Nejvyšší správní soud (Czech Republic) 
Date of decision to refer:  
26 October 2022 
Applicant:  
B2 Energy s.r.o. 
Defendant:  
Odvolací finanční ředitelství 
  
[…] 
O R D E R   
The Nejvyšší správní soud (the Supreme Administrative Court, Czech Republic) 
has ruled […] in the case of the applicant: B2 Energy s.r.o., […] v. the defendant: 
Odvolací finanční ředitelství (The Appellate Tax Directorate) […] with respect 
to an action challenging the defendant’s decision of 21 November 2019, […] in 
proceedings concerning the applicant’s administrative complaint on a point of law 
challenging a judgment of the Městský soud v Praze (Prague City Court, Czech 
Republic) of 18 August 2021, ref. no 14 Af 4/2020-48, 
A s  f o l l o w s : 
I. The following question is hereby s u b m i t t e d  to the Court of Justice of the 
European Union for a preliminary ruling: 
Must Article 138(1) of Council Directive 2006/112/EC of 28 November 2006 
on the common system of value added tax be interpreted in accordance with 
the judgment of the Court of Justice of the European Union of 9 December 
2021 in Case C-154/20, Kemwater ProChemie, EU:C:2021:989, such that the 
EN 
REQUEST FOR A PRELIMINARY RULING OF 26. 10. 2022 – CASE C-676/22 
 
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making of a claim for exemption from value added tax (VAT) upon the 
supply of goods to another EU Member State must be denied, without the tax 
authorities needing to prove that the supplier of the goods was involved in 
VAT fraud, if the supplier has failed to prove supply of goods to a specific 
recipient in another EU Member State having the status of the taxable person 
specified in the tax documents, even though, with a view to the facts of the 
case and the information provided by the taxable person, there is data 
available to verify that the actual recipient in the other EU Member State did 
indeed have that status? 
[…] 
G r o u n d s :  
I. Subject of the proceedings  
[1] The applicant is a Czech trading company. On 15 July 2015, the tax 
authorities initiated a tax inspection of the applicant for the taxable periods of 
February, March, April, and May 2015. On the basis of that inspection, it 
concluded that the applicant had failed to document compliance with the 
conditions for a claim to a value added tax (‘VAT’) exemption upon the supply of 
goods to another European Union (‘EU’) Member State lodged on the basis of a 
tax document in which the following entities were listed as the recipients of the 
goods: the cooperative OOV-Družstvo Malinovo and the company BICOTEC 
LIMITED (‘the recipients of the goods’). The documents submitted pertained to 
deliveries of rapeseed oil to another EU Member State. The applicant presented to 
the tax authorities tax documents pertaining to the performance provided, 
inclusive of their annexes in the form of purchase orders, delivery documents, 
international consignment notes, weighbridge tickets, certificates of the 
measurement of the quality of the goods, as well as framework purchase 
agreements, a framework agreements for the carriage of goods, and bank account 
statements.  
[2] The tax authorities did not question that the carriage of the goods to another 
Member State did actually take place; however, they maintained that the applicant 
had failed to document its claims, as it had failed to document that it had 
transferred the right to dispose of the goods to the persons specified as the 
recipients of the goods in the documents submitted (the cooperative OOV-
Družstvo Malinovo and the company BICOTEC LIMITED), or that the goods 
were supplied to a person registered for tax in another Member State. Thus, it 
failed to comply with the conditions for claiming a right to tax exemption. The 
recipients of the goods from the applicant failed to report the acquisition of goods 
from the Czech Republic or the delivery of goods within the EU in the form of a 
trilateral transaction and failed to pay the tax on the acquisition of the goods 
purchased from another Member State. The supply of the goods was also not 
certified in relation to the companies DRAGSTAL and WRATISLAVIA-BIO, 
even though the applicant claimed that they were to be its actual end customers. In 
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some of the CMR documents and weighbridge tickets, the company 
WRATISLAVIA-BIO was stated as the owner of the goods, but the confirming 
signature and stamp belonged to a different entity, the company Wratislavia-
Biodiesel, meaning that the complainant has failed to prove supply of the goods to 
the company WRATISLAVIA-BIO. The fact that the recipients paid for the 
rapeseed oil does not, in itself, document that they acquired the right to dispose of 
the goods as their owners. Some of the international consignment notes submitted 
with the invoices issued to the recipients of the goods were not confirmed, not 
even by the final recipients, or were confirmed by totally different entities. The 
actual hand-over of the goods to the declared recipients in another EU Member 
State has also not been confirmed by witnesses.  
[3] The tax authorities thus increased the value added tax claimed in payment 
assessments dated 6 October 2017, assessing the applicant for VAT of 
CZK 66,323 in respect of the taxable period of February 2015, CZK 68,490 in 
respect of March 2015, CZK 74,359 in respect of April 2015, and CZK 8,486 in 
respect of May 2015. 
[4] The defendant dismissed the appeal challenging the payment assessments in 
a decision dated 21 November 2019 […]. The decision of the defendant was 
challenged by the applicant before the Městský soud v Praze (Prague City Court) 
(‘City Court’). The City Court dismissed the application challenging the decision 
of the defendant, in its judgment dated 18 August 2021, ref. no 14 Af 4/2020-48. 
According to the City Court, it was not the production of tax documents 
(compliance with formal requirements) or the carriage of the goods to another 
Member State that were questionable, but both the tax authorities as well as the 
defendants questioned the supply of the goods to the declared recipients.  
[5] The City Court inferred from case-law of the Court of Justice of the 
European Union, primarily from the judgment dated 27 September 2007, in Case 
C-409/04, Teleos plc and Others, EU:C:2007:548, that the applicant failed to 
prove supply of the goods to its final recipients through the declared recipients. It 
was not apparent from the documents produced who accepted the goods on behalf 
of the recipients or to which recipient the goods were delivered, which was 
moreover not even confirmed by the witnesses heard. Hence, it is not clear who 
was entitled to exercise ownership rights to the goods (rapeseed oil). The City 
Court emphasised that the defendant did not accuse the applicant of involvement 
in tax fraud but for its failure to substantiate its tax claims. Given the facts of the 
case, the applicant was thus not acting in good faith as concerns the de facto 
transfer of the right to dispose of the rapeseed oil, as the owner to the declared 
recipients of the goods.  
[6] The applicant (complainant) lodged an administrative complaint on a point 
of law challenging the judgment of the City Court, asserting that it had proven 
compliance with conditions for claiming a tax exemption upon the supply of 
goods to another EU Member State. As concerns the assessment of the time when 
the right to dispose of the goods as the owner arose, the complainant first asserted 
REQUEST FOR A PRELIMINARY RULING OF 26. 10. 2022 – CASE C-676/22 
 
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that, even if it failed to prove supply of the goods to the declared recipients, it had, 
nevertheless, met all three conditions for being entitled to claim a VAT exemption 
upon the supply of goods to another EU Member State. The identity of the actual 
recipient, to which the right to dispose of the goods as their owner has been 
transferred, can be ascertained from the evidence produced. That evidence has 
convincingly proven the de facto acceptance of the goods in the city of Wrocław, 
Poland, by its end recipients – companies other than those entities declared in the 
relevant tax documents. 
II. Applicable European Union legislation and national legislation  
[7] Article 131 of Council Directive 2006/112/EC of 28 November 2006 on the 
common system of value added tax stipulates that tax exemptions shall apply 
without prejudice to other Community provisions and in accordance with 
conditions which the Member States lay down for the purposes of ensuring the 
correct and straightforward application of those exemptions and of preventing any 
possible evasion, avoidance or abuse. 
[8] According to Article 138(1) of Directive 2006/112/EC, Member States are 
to exempt the supply of goods dispatched or transported to a destination outside 
their respective territory but within the Community, 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. 
[9] The directive itself (unlike in the procedure for claiming a VAT deduction, 
see Article 168(a) and Article 178(a) of the Directive) does not have a specific 
provision listing the evidence that must be produced by a taxable person in order 
to be able to claim a tax exemption. 
[10] A taxable person is defined in Article 9(1) of Directive 2006/112/EC as any 
person who, independently, carries out in any place any economic activity, 
whatever the purpose or results of that activity. 
[11] Article 287 of Directive 2006/112/EC stipulates that Member States which 
acceded after 1 January 1978 may exempt taxable persons whose annual turnover 
is no higher than the equivalent in national currency of the following amounts at 
the conversion rate on the day of their accession […]. For the Czech Republic, 
point (7) sets that turnover at EUR 35,000. For other Member States, similar 
exemptions with different limits are provided in Articles 284 to 286 of Directive 
2006/112/EC. 
[12] With a view to the option specified in Article 287 of Directive 2006/112/EC, 
under the laws of the Czech Republic, a taxable person becomes a taxpayer 
pursuant to Paragraph 6(1) of zákon č. 235/2004 Sb., o dani z přidané hodnoty 
(Law 235/2004, on value added tax) (‘the VAT Law’) if its turnover in no more 
than the 12 immediately preceding consecutive calendar months exceeds 
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CZK 1,000,000, with the exception of a person effecting solely tax-exempt 
performances without a right to a tax deduction. 
[13] The substantive condition for a claim to a tax exemption is the supply of the 
goods to another EU Member State. The right to the tax exemption arises subject 
to the conditions set out in Paragraph 64 of the VAT Law, in the version 
applicable to the case in question. The foundation is that tax exemption with a 
right to a deduction attaches to the supply of goods to another Member State by a 
taxpayer to a person registered for tax purposes in another Member State to whom 
the goods are dispatched or transported from the Czech Republic by the taxpayer 
or the person acquiring the goods or an authorised third party. An exception 
applies to the supply of goods to a person for whom the acquisition of the goods in 
another Member State is not subject to tax. 
[14] Pursuant to Paragraph 4(1)(e) of the VAT Law, taxable performance is the 
delivery of goods or provision of a service for consideration by a taxable person 
acting as such. Pursuant to Paragraph 4(1)(f) of the VAT Law, a person registered 
for tax purposes is a person who has been granted a tax identification number for 
value added tax purposes in the scope of trading among Member States. 
[15] The supply of goods is defined by Paragraph 13(1) of the VAT Law as a 
transfer of the right to dispose of the goods as their owner. Pursuant to Paragraph 
13(2), the supply of goods to another Member State means, for the purpose of that 
Law, the supply of goods that are actually dispatched or transported to another 
Member State. 
[16] Pursuant to Paragraph 92(3) of zákon č. 280/2009 Sb., daňový řád (Law 
280/2009, the Tax Code), a taxable person shall document all facts that the entity 
is obliged to state in its regular tax return, supplementary tax return, and other 
submissions. 
III. Analysis of the preliminary reference  
[17] In the present case, the Supreme Administrative Court is faced with the 
question of whether a right to a value added tax deduction can be denied upon the 
supply of goods to another Member State where the actual recipient of the goods, 
in connection with which the supplier is claiming a tax exemption, is not known. 
[18] […] 
[19] In its case-law pertaining to Articles 131 and 138 of Directive 2006/112/EC, 
the Court of Justice emphasised repeatedly that, in assessing a right to a value 
added tax exemption or the requirements that a taxable person must meet, 
Member States’ tax authorities are always obliged to apply the principle of legal 
certainty, the principle of protecting legitimate expectations, and the principle of 
proportionality. According to the laws of the Czech Republic, the burden of proof, 
as concerns proving compliance with the substantive conditions, is borne by the 
taxable person. The same conclusions, however, arise from the prevailing case-
REQUEST FOR A PRELIMINARY RULING OF 26. 10. 2022 – CASE C-676/22 
 
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law of the Court of Justice. The case-law of the Court of Justice modifies the 
burden of proof only to the extent that it prohibits the tax authorities and Member 
States from imposing on taxable persons additional conditions which are not 
compliant with the objectives pursued by Directive 2006/112/EC. In proving 
involvement in tax fraud, the burden of proof is reversed and involvement in fraud 
must be proven by the tax authorities. 
[20] Even though the Directive itself does not contain any specific provisions 
pertaining to the evidence that must be produced by the taxable person in order to 
be able to claim a value added tax exemption, the Court of Justice stated in 
specific cases that, in order to obtain a value added tax exemption, an importer 
must prove that, at the time of import, the goods concerned were intended for 
dispatch or transport to another Member State and that they were thus dispatched 
or transported as part of its subsequent supply within the Community; dispatch to 
a specific address of the entity acquiring the goods need not be proven. Such 
evidence may include documents of transport from a tax warehouse in the export 
Member State to a tax warehouse in another Member State. 
[21] In terms of proving the right to a VAT deduction under Article 168 and 
Article 178 of Directive 2006/112/EC, the Court of Justice answered a preliminary 
reference submitted by an extended chamber of the Supreme Administrative Court 
in its recent judgment of 9 December 2021 in Case C-154/20, Kemwater 
ProChemie, EU:C:2021:989, as follows: ‘Council Directive 2006/112/EC of 
28 November 2006 on the common system of value added tax must be interpreted 
as meaning that the right to deduct input value added tax (VAT) must be refused, 
without the tax authorities having to prove that the taxable person committed VAT 
fraud or that he or she knew, or ought to have known, that the transaction relied 
on to establish the right of deduction was connected with such fraud, where, the 
true supplier of the goods or services concerned not having been identified, that 
taxable person fails to adduce proof that that supplier had the status of taxable 
person, provided that, taking into account the factual circumstances and the 
evidence produced by that taxable person, the information needed to verify that 
the true supplier had that status is lacking’ 
[22] Hence, the Court of Justice confirmed that the status of the supplier of goods 
or provider of services as a taxable person (or, in the case of the Czech Republic, a 
VAT payer) is one of the substantive conditions for being entitled to claim a VAT 
deduction; nevertheless, it admitted that, under certain conditions, that supplier 
need not be clearly identified, as long as the facts of the case indicate with 
certainty that it had the status of a VAT payer. The burden of proof in this regard 
lies with the person claiming the right to a VAT deduction. An exception is a 
situation when the information required to verify whether the substantive 
condition of a right to a VAT deduction has been met is available to the tax 
authorities.  
[23] According to the conclusions of the Court of Justice stated in the judgement 
cited above, it is therefore not necessary to prove in tax proceedings that taxable 
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performance was provided by a specific supplier who had the status of a VAT 
payer. The possibility was thus admitted that, despite the identity of the supplier 
not being ascertained, the substantive conditions for a claim to a VAT deduction 
will however be met if the tax authorities have, in view of the facts of the case, 
information required to verify that the actual supplier had the status of a VAT 
payer. 
[24] The facts of the case ascertained in this case indicate that the complainant 
carried out transport of rapeseed oil to another Member State without proving that 
it indeed supplied it to the declared recipients (the cooperative OOV-Družstvo 
Malinovo and the company BICOTEC LIMITED). The goods were, however, 
delivered to specific addresses located in another EU Member State, where their 
receipt was confirmed by other entities. In CMR document no 1988977, the 
delivery of the goods for which the declared recipient was stated as ‘the 
cooperative OOV-Družstvo Malinovo’ was confirmed by the stamp and signature 
of the company RPA. In the applicable CMR documents and weighbridge tickets 
for the delivery of the goods for which the company BICOTEC LIMITED was 
listed as the declared recipient was confirmed by the stamp and signature by the 
entity ‘Sklad Wroclaw, ul. Swojczycka 32, 51-501 Wroclaw’ (also designated as 
‘Magazyn-Wroclaw’) and by the company ‘Wratislavia-Biodiesel’. The company 
WRATISLAVIA-BIO was listed as the owner of the goods in the weighbridge 
tickets presented for some of the supplies assessed, while they were also 
confirmed by the stamp and signature of the company Wratislavia-Biodiesel. 
[25] Furthermore, it must be stressed that there was no dispute as concerns the 
transport of the rapeseed oil from the Czech Republic to Poland and its subsequent 
drainage from the transport company’s tanks for other customers not identified by 
the complainant in its tax returns, and the tax authorities failed to grant the 
complainant its right to a tax exemption due only to the fact that the complainant 
had failed to document delivery of the goods to the declared recipients. 
Furthermore, rapeseed oil was being delivered to destinations in weights in excess 
of tens of metric tonnes, i.e., in the value of tens of thousands of euros. It is, 
therefore, hard to imagine that the actual recipients of the goods in question were 
not VAT payers. 
[26] For these reasons, the question arose whether the conclusions formulated in 
the judgment in the case Kemwater ProChemie can also be applied in the present 
case and whether documenting compliance with the substantive conditions for 
claiming a VAT exemption upon the supply of goods to another EU Member State 
includes the obligation of the taxable person to document that the goods were 
received by a specific recipient (declared by the taxable person) who had the 
status of a taxable person or whether it will suffice that the facts of the case 
indicate that the goods were accepted in another EU Member State by another 
actual recipient and that it had (or it is evident from the facts of the case that it 
must have had) the status of a taxable person.  
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[27] The Supreme Administrative Court is aware of the conclusions formulated 
in the judgment of the Court of Justice of 17 October 2019 in Case C-653/18, 
Unitel sp. z o.o., EU:C:2019:876, according to which the right to a VAT 
exemption cannot be granted if the absence of an identified actual recipient 
prevents the submission of evidence that the performance constitutes supply of 
goods outside of the European Union. That decision, however, first, pertains to a 
different situation – to the supply of goods outside of the EU, and secondly, it 
does not answer the question of whether it is also the case when the facts of the 
case convincingly indicate that, even though the goods were not accepted by the 
recipient declared in the tax documents, they were accepted at the destination by 
another actual recipient who had (or must have had) the status of a taxable person. 
In other words, it is in dispute whether, in this case, the existing case-law as 
expressed in the judgment in Kemwater ProChemie may be shifted somewhat. 
The Supreme Administrative Court holds that the question of the tax exemption of 
goods supplied to another Member State is, to a certain degree, comparable to the 
issue of a right to input tax deduction, in that, in both cases, the relevant 
substantive condition is a trading partner in the transaction concerned who has the 
status of a taxable person (in the case of a right to a deduction, it is the supplier of 
the taxable performance concerned, whereas in the case of a tax exemption upon 
the supply of goods to another Member State, it is the recipient of the goods in the 
other Member State). 
[28] The need to apply the conclusions reached in the judgment in Kemwater 
ProChemie to an assessment of the right to a tax exemption in the event of the 
supply of goods to another Member State has been inferred by the Supreme 
Administrative Court in its judgment of 4 February 2022, ref no 4 Afs 115/2021-
45, in which it stated that, in assessing a taxable person’s right to a VAT 
exemption upon the supply of goods to another EU Member State, it is not 
possible to deny the taxable person that right if it was evident from the facts of the 
case that it indeed supplied the goods to another EU Member State, even though it 
has failed to document their supply to the declared recipients. According to […] 
[the referring court] it would run contrary to the principle of tax neutrality if a 
taxable person were denied the right to a VAT tax exemption upon the supply of 
goods to another EU Member State if it proved the supply of the goods concerned 
to another actual recipient. In that situation, however, it must be verified whether 
it is evident from the facts of the case and from the information available to the 
tax authorities, or provided by the taxable person, that the actual recipients of the 
goods from the taxable person had the status of VAT taxable persons. 
[29] Conversely, in its judgment of 25 May 2022, ref no 10 Afs 374/2020-59, the 
Supreme Administrative Court subsequently concluded that the conclusions 
formulated by the Court of Justice in Kemwater ProChemie do not pertain to VAT 
exemptions upon the supply of goods to another EU Member State. In the 
judgment cited above, […] [the Supreme Administrative Court] noted that in such 
a case, the ‘supplier must provide evidence that its customer abroad is a “taxable 
person acting as such” (judgment of the Court of Justice of 27 September 2012 in 
Case C-587/10, [VSTR]). This case-law of the Court of Justice is confirmed by 
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recent judgments of the Supreme Administrative Court, of 10 February 2022, ref. 
no 9 Afs 274/2020 – 61, molton, and of 24 February 2022, ref no 1 Afs 
238/2020 – 59, Steris, according to which a Czech supplier must document that 
the entity abroad was the actual recipient of the goods’ 
[30] This conflict in the case-law of the Supreme Administrative Court therefore 
documents the complexity of the legal issue at hand and the need for a ruling of 
the Court of Justice. 
[…]