CJEU dealt with assigning of transport in a Czech case

Herst was at the end of a chain of transactions comprising the acquisition of fuel from another member state, while they also arranged transport. Under the contracts concluded, the fuel was supplied to Herst after the regime of excise duty suspension had ended. The CJEU dealt with the point in time when the goods were supplied to Herst (i.e. when the right to dispose of the goods as their owner was transferred).

The CJEU held that in assigning the intra-Community transport, it is crucial to determine whether Herst had gained the right to dispose of the goods as their owner, meaning the possibility to take decisions likely to affect the legal situation of the goods, including, in particular, the decision to sell them. If this right has been gained before the transportation was initiated, it is an intra-Community acquisition, even if the legal title had only been transferred to Herst after the goods were released for free circulation in the Czech Republic. According to the CJEU, it is up to the referring court to make an assessment of these circumstances.

The CJEU also dealt with the application of the in dubio mitius principle in national law. The court assessed whether, where national law offers various interpretations, the one that is most favourable for the taxpayer shall be chosen. Here, the CJEU answered that the national court has to consider all rules stipulated by national law and use interpretation methods accepted by the CJEU so as to interpret national law as far as possible in the light of the wording and purpose of the VAT Directive. The national court should interpret national law in the same manner as the CJEU interprets the directive, to achieve the result pursued by the directive. The application of the in dubio mitius principle is therefore incompatible with EU law.