Goods declared as intra-Community supply are exported outside the EU – CJEU judgment

On August 1, 2025, the CJEU issued its long-awaited judgment on the reclassification of transactions from intra-Community supply to export in a case concerning a Polish taxpayer (C‑602/24).

Facts

The case concerns a situation where the initial arrangements between the parties to the transaction do not correspond to the actual movement of goods. According to the Polish supplier’s knowledge, the goods were moved from Poland to Lithuania. With consignment notes confirming this movement of goods, the transaction was reported as an intra-Community supply of goods subject to 0% VAT rate. However, the Polish tax authorities determined that the buyer ultimately transported the products outside the EU, as evidenced by customs documents they were able to obtain.

The Polish tax authorities questioned whether the transaction met the criteria for an intra-Community transaction, as there was no movement of goods to the territory of another Member State. In addition, it was found that the company had failed to properly verify the place of delivery of the goods, relying solely on a formal verification of the documents. As a result, the tax authorities considered that the delivery constituted a domestic supply subject to 5% VAT rate and imposed an additional 30% penalty.

The case was referred to Wojewódzki Sąd Administracyjny w Warszawie, where the Polish company argued that, in view of the circumstances, the transaction should be reclassified as indirect export, subject to 0% VAT rate. The court agreed with the company that the substantive legal conditions for the indirect export procedure had been met.

Following an appeal, the Naczelny Sąd Administracyjny overturned the judgment and the case was referred back to Wojewódzki Sąd Administracyjny w Warszawie, which decided to refer the case to the Court of Justice for a preliminary ruling due to uncertainty as to how to classify the transaction for VAT purposes. The following issues were disputed:

• Should a supply of goods declared by a company as intra-Community supply be considered an export if the purchaser exports the goods not to another Member State but outside the EU?
• Is it relevant for the application of the 0% rate that the purchaser exports the goods outside the EU without the supplier’s agreement and without its knowledge?
• Is it relevant if the export of goods outside the EU is based on the findings of the tax authorities resulting from customs documents that contradict the transport documents in the supplier’s possession?

CJEU ruling

The CJEU ruled in favor of an interpretation of the provisions that is favorable to the taxpayer and held that 0% VAT rate applies to the supply of goods originally declared by the supplier as intra-Community supply, which was carried out by the purchaser outside the EU without the supplier’s knowledge, if the export in question was established by the tax authorities on the basis of customs documents.

In its reasoning, the CJEU emphasized the importance of the definitions of export of goods and supply of goods and the importance of meeting the objective criteria of those definitions. It also pointed out that circumstances such as the supplier’s failure to check where the goods sold by him are delivered and the limitation to a formal check of the documents are irrelevant for the classification of a transaction as an export. This is because the right to dispose of the goods as owner was transferred to the purchaser, who was to make the delivery in accordance with the terms of the contract concluded between the parties.

In addition, it is essential that the objective conditions for the application of the exemption provided for exports of goods are met. The fact that the parties originally agreed that the transaction would be an intra-Community supply of goods, which was ultimately not carried out, and that the supply outside the EU took place without the supplier’s knowledge, are subjective circumstances which, according to the CJEU, are not significant.

The fact that the documents proving the export delivery were obtained by the Polish tax authority and not by the supplier is also irrelevant for the classification of the transaction as an export of goods. It is undisputed that the goods physically left the territory of the Union and that the consumption of the goods did not take place within the EU. As already ruled by the CJEU, in light of the fulfillment of the substantive conditions, in accordance with the principle of neutrality, it is required that the VAT exemption be granted even if the taxpayer has omitted certain formal requirements.

Significance of the judgment

Although the right to 0% VAT rate applies to both types of transactions at issue (intra-Community supply and export), the conditions for documentation are extremely different. As a rule, the lack of documentation entails the risk of having to apply the domestic rate.

In light of the judgment, it is worth paying attention to the documentation processes in companies and the cooperation between the accounting and logistics departments. Effective communication allows for the avoidance of errors, such as incorrect classification of transactions into the appropriate tax categories, which may lead to disputes with the tax authorities.

According to the CJEU judgment, in the case of exports, the right to 0% VAT rate should be maintained despite a formal error on the part of the taxpayer. The classification of the transaction in the tax return is of lesser importance here than the actual export outside the EU. Once again, the importance of fulfilling the material conditions for the classification of a given transaction and for the application of VAT exemptions has been emphasized. The judgment is of key importance for taxpayers who have been misled by their contractors as to the actual course of the transaction.