Brussels, 04/07/2014 (Agence Europe) - The “delivery address” that decides the VAT system applying to goods must be determined by the place where the goods were shipped to in their finished state, ruled European Court of Justice Advocate General Julianne Kokott on Thursday 3 July in case C-446/13.
French company Atral ordered metal parts from Italian company Fonderie 2A. The parts were sent by Fonderie 2A to France first to be painted by a different company there. The painted parts were then shipped directly to Atral. The Italian company says that the delivery address was Italy, because that is where they were made, and asked the French VAT office to repay the VAT on the charge for painting the parts under the inter-EU VAT exemption scheme.
The French VAT office refused to repay the VAT, arguing that the delivery address was in France, because it was in that country that the finished parts (the painted metal) had been shipped to the purchaser. Therefore the shipment is subject to French VAT rules. The Italian company should have registered for VAT in France in order to be eligible for repayment of the VAT.
In her opinion, the Advocate General stated that the French VAT office had reasoned correctly. The delivery address was indeed in France and it is the time when the parts are as stated in the contract that decides the delivery address. If the Italian company had decide to have the parts painted in Italy, then it would have been entitled to repayment of the VAT. (JK)