The claimant, a Portuguese subsidiary of a Dutch company Euro Tyre BV, sells tyres to retailers established in Portugal and in Spain. It has declared intracommunity supplies to Spain. The Portuguese tax authorities rejected this exemption, arguing that, at the time of the supply, the buyer, established and VAT registered in Spain for local transactions, was neither registered on the VIES system nor locally registered to benefit from the specific regime applicable to intracommunity operations.
The CJEU considers that neither the VAT Directive nor its own case law mention, among the substantive conditions to benefit from the intracommunity supplies exemption, the obligation for the buyer to have an intracommunity VAT number, on the one hand, and that this VAT number must be recognized in the VIES system, on the other hand. Consisting only in formal requirements, these two conditions cannot jeopardize the seller’s right to deduct VAT if the exemption’s substantive conditions are met and if there is no sound evidence pointing to the existence of fraud.