Twoh International BV v Staatssecretaris van Financiën.
Date: 2007-09-27
22. It should be noted at the outset that, under the transitional VAT regime applicable to intra-Community trade, established by Council Directive 91/680/EEC of 16 December 1991 supplementing the common system of value added tax and amending Directive 77/388/EEC with a view to the abolition of fiscal frontiers (OJ 1991 L 376, p. 1), the taxation of trade between Member States is based on the principle that the tax receipt is attributed to the Member State where final consumption takes place. Any intra-Community acquisition that is taxed in the Member State where the dispatch or intra-Community transport of goods ends under the first subparagraph of Article 28a(1)(a) of the Sixth Directive has, as a corollary, an exempted supply in the Member State in which that dispatch or transport began under the first subparagraph of Article 28c(A)(a) of that directive (Case C‑245/04 EMAG Handel Eder  [2006] ECR I‑3227, paragraph 29; Case C‑409/04 Teleos and Others  [2007] ECR I-0000, paragraphs 22 and 24).
23. Concerning the conditions in which exemption of the intra-Community supply of goods for the purposes of the first subparagraph of Article 28c(A)(a) of the Sixth Directive becomes applicable, the Court held in paragraph 42 of its judgment in Teleos and Others  that it is necessary for that purpose for the right to dispose of the goods as owner to have been transferred to the buyer and for the supplier to establish that the goods have been dispatched or transported to another Member State and that, as a result of that dispatch or transport, the goods have physically left the territory of the Member State of origin.
24. The Court has also held, in paragraph 44 of Teleos and Others , that, following the abolition of frontier controls between Member States, it is principally on the basis of evidence provided by taxable persons and of their statements that the tax authorities are to check whether or not the goods have physically left the territory of the Member State of dispatch.
25. As for the evidence which taxpayers are required to provide, there is no provision of the Sixth Directive which deals directly with the question. That directive merely provides, in the first part of the sentence in Article 28c(A), that it is for the Member States to determine the conditions in which they will exempt intra-Community supplies of goods. However, when they exercise their powers, Member States must comply with general principles of Community law, which include, in particular, the principles of legal certainty and proportionality (see, to that effect, Joined Cases C‑286/94, C‑340/95, C‑401/95 and C‑47/96 Molenheide and Others  [1997] ECR I‑7281, paragraph 48; Case C‑384/04 Federation of Technological Industries and Others  [2006] ECR I‑4191, paragraphs 29 and 30).
26. The Court considers that, as the Commission of the European Communities has correctly argued, the principle that the burden of proving entitlement to a tax derogation or exemption rests upon the person seeking to benefit from such a right is to be viewed as being within the limits imposed by Community law. Thus, for the purpose of applying the first subparagraph of Article 28c(A)(a) of the Sixth Directive, it is for the supplier of the goods to furnish the proof that the conditions for exemption referred to in paragraph 23 of this judgment are fulfilled.
27. In that context, it should be noted that, in paragraph 50 of its judgment in Teleos and Others , the Court held that it would be contrary to the principle of legal certainty for a Member State, having laid down the requirements for applying the exemption for intra-Community supply, such as by prescribing a list of the documents to be presented to the competent authorities, and which initially accepted the documents presented by the supplier as documentary evidence of the right to the exemption, subsequently to require that supplier to account for the VAT on that supply where it becomes apparent that, by reason of a fraud by the buyer of which the supplier could not have been aware, the goods concerned did not in fact leave the territory of the Member State of supply.
28. It is true that in this case, unlike in Teleos and Others , the decision to refer gives no details concerning the good faith of Twoh and gives no indication as to whether its customer committed a fraud. What is important in this case is the fact that Twoh, being unable to provide the necessary evidence to establish that the goods have in fact been dispatched to the destination Member State, has requested the Netherlands tax authorities to gather information capable of demonstrating the intra-Community nature of its supplies from the competent authority of that latter Member State, in application of the mutual assistance directive and the administrative cooperation regulation. The question that thus arises is whether those tax authorities were required to accede to such a request.
30. First, concerning the purpose of those two Community measures, the first and second recitals of the mutual assistance directive and the third recital of the administrative cooperation regulation show that their aim is to combat tax evasion and avoidance and to allow Member States to determine exactly the amount of tax to levy (see, by analogy, Case C‑420/98 W.N.  [2000] ECR I‑2847, paragraphs 15 and 22, and, concerning Council Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in the field of value added tax and repealing Regulation (EEC) No 218/92 (OJ 2003 L 264, p. 1), Case C‑533/03 Commission  v Council  [2006] ECR I‑1025, paragraphs 49 and 52).
31. Secondly, concerning the content of those Community measures, it is clear from the titles of the mutual assistance directive and the administrative cooperation regulation that they were adopted in order to govern cooperation between the tax authorities of the Member States. As both the Commission and the Advocate General, in point 23 of her Opinion, have pointed out, those legal measures confer no right on individuals other than that of obtaining confirmation of the validity of the ‘value added tax identification number of any specified person’ in accordance with Article 6(4) of the administrative cooperation regulation.
32. The mutual assistance directive does provide, with a view to preventing tax evasion, for the possibility of national tax authorities requesting information which they cannot obtain for themselves. Thus, the fact that, both in Article 2(1) of that directive and in Article 5(1) of the administrative cooperation regulation, the Community legislature used the word ‘may’ indicates that, whilst those authorities have the possibility of requesting information from the competent authority of another Member State, such a request does not in any way constitute an obligation. It is for each Member State to assess the specific cases in which information concerning transactions by taxable persons in its territory is lacking and to decide whether those cases justify submitting a request for information to another Member State.
33. Further, those Community measures also lay down limits on cooperation between the Member States, since the authorities of the requested State are not required to supply the information requested in all circumstances. Indeed, the first indent of the first subparagraph of Article 7(1) of the administrative cooperation regulation provides that the number and nature of the requests for information made within a given period may not impose disproportionate administrative burdens on those authorities. Moreover, the second indent of the same provision as well as Article 2(1) of the mutual assistance directive provide that the latter are not required to supply information where it appears that the competent authority of the requesting State has not exhausted its own usual sources of information.
34. It follows that the mutual assistance directive and the administrative cooperation regulation were not adopted for the purpose of establishing a system for exchanging information between the tax authorities of the Member States allowing them to establish the intra-Community nature of supplies made by a taxable person who is not himself able to provide the necessary evidence for that purpose.
35. That finding is also corroborated by the case-law of the Court of Justice on mutual assistance between the competent authorities in the area of direct taxation, which is transposable by analogy to a situation such as that in the main proceedings. According to that case-law, the mutual assistance directive may be relied on by a Member State in order to obtain from the competent authorities of another Member State all the information enabling it to ascertain the correct amount of tax. There is, however, nothing to prevent the tax authorities concerned from requiring the taxpayer himself to provide such proof as they may consider necessary in order to determine whether or not the deduction requested should be granted (see, to that effect, Case C-55/98 Vestergaard  [1999] ECR I-7641, paragraph 26; Case C-136/00 Danner  [2002] ECR I-8147, paragraphs 49 and 50).
36. The information which the mutual assistance directive allows the competent authorities of a Member State to request is in fact all the information which appears to them to be necessary in order to ascertain the correct amount of tax in relation to the legislation which they have to apply themselves. That directive does not in any way affect the competence of those authorities to assess in particular whether the conditions to which that legislation subjects the exemption of an operation are fulfilled (see, by analogy, Vestergaard , paragraph 28).
37. Finally, it should be added that, even if the tax authorities of the dispatching Member State did obtain information from the destination Member State that the buyer had submitted a declaration to the tax authorities of that latter State that there was intra-Community acquisition, such a declaration does not constitute decisive proof capable of establishing that the goods actually left the territory of the dispatching Member State ( Teleos and Others , paragraphs 71 and 72).
38. In view of the above considerations, the answer to the question referred must be that the first subparagraph of Article 28c(A)(a) of the Sixth Directive, read in conjunction with the mutual assistance directive and the administrative cooperation regulation, does not require the tax authorities of the Member State of dispatch or transport on an intra-Community supply of goods to request information from the authorities of the destination Member State alleged by the supplier.
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