The moment of export from a VAT perspective
Last year’s amendment to the VAT Act changed the definition of a tax document upon the export of goods. A recent contribution submitted by the Chamber of Tax Advisors for discussion in the coordination committee with the GFD clarifies the moment at which a taxable supply involving the export of goods is effected as well as the moment an export of goods is reported in a VAT return.
Pursuant to an amendment to the VAT Act in effect from 29 July 2016, a tax document upon the export of goods is a standard tax document, replacing the existing export-accompanying document. The tax document’s essential element is the date of supply, which is the date on which goods exit the EU territory, confirmed by the customs authority. In practice, however, it may happen that the moment at which goods exit the EU territory is not known on a tax document’s issuance date. The date of supply can therefore not be stated in the relevant tax document. Moreover, it is quite unclear in what VAT return the export of goods should be included.
The Chamber of Tax Advisors along with the GFD discussed this issue within the coordination committee. The contribution submitters point out that, at variance with Czech legislation, the EU VAT Directive does not explicitly define the moment at which an export is deemed effected but only applies the same general rules as for the delivery of any other goods. The directive therefore considers an export effected on the date goods are delivered to the buyer.
The contribution submitters propose that the date of supply stated in the tax document upon an export of goods should be the date goods were delivered or the date goods physically left the EU territory. And where the moment of supply cannot be determined on the tax document’s issuance date, the date of supply should be omitted. This procedure should not affect the application of exemption from VAT, as shown in the Court of Justice of the EU’s case law.
The GFD agrees that it is possible to choose between the date of supply under the VAT Act (the date goods exit the EU) or the date of supply under the EU directive (the date goods are delivered to the buyer), but deems it unacceptable to omit such information entirely.
The submitters also propose that the export of goods be reported in a VAT return for the period in which goods were delivered to the buyer, without any possible sanctions imposed for such reporting by the tax authority. The GFD agrees with this proposal but points out that increased attention might be paid by the tax authority to any inconsistences between the data declared in VAT returns and supporting documentation.