LUXEMBOURG, Aug. 1, 2025
ECJ Clarifies VAT Export Exemption Rules
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A Polish firm’s claim for a VAT exemption on goods exported to Belarus was scrutinized by the European Court of Justice.
Does a VAT exemption for exports apply if goods are sent from one EU member state to another but ultimately leave the EU via a third country? The European Court of Justice weighed in on this complex tax question on Aug. 1, issuing a preliminary ruling in Case No. C-602/24. The core issue involved a Polish company seeking a Value Added Tax (VAT) exemption for goods supplied within the EU to a Latvian-registered company. This Latvian company then exported the goods from Poland to Belarus. Polish tax authorities denied the exemption, arguing the goods were not transferred directly to another EU Member State.
The court’s interpretation of Directive 2006/112/EC, which governs the common VAT system, is crucial for businesses engaged in international trade.
The Polish Company’s Argument
The Polish taxpayer contended that the transaction should qualify for the VAT exemption. They argued that the supply was an intra-Community one, and the subsequent export fulfilled the conditions for exemption.
However, the Polish tax authorities disagreed. Their stance was that the exemption for intra-Community supplies requires the goods to be transferred to another EU Member State. Since the goods were ultimately exported outside the EU to Belarus, they did not meet this specific requirement.
ECJ’s Preliminary Ruling
The ECJ’s preliminary ruling on Aug. 1 clarified the interpretation of Directive 2006/112/EC. The court’s finding is expected to set a precedent for similar cases involving goods that transit through EU member states before final export outside the bloc.
