Since January 1, 2022, the scope of application of Art. 146 para. 1 lit. e of the VAT System Directive (VATSystRL) and Section 4 para. 3 of the German VAT Act (UStG), which is based on this, has been severely restricted.

Transportation from Germany to third countries is then only exempt from VAT in the relationship between the consignor and the first forwarder or the consignor and the main carrier. This is usually the contractual relationship between the seller or buyer of the goods to be transported and the logistics service provider commissioned by them (principal - contractor).

Subcontractors or sub-suppliers can no longer claim this type of VAT exemption. In the opinion of the ECJ, there is no direct link between the underlying commercial transaction in relation to the transport goods (purchase/sale) and the transport service to be performed for the other companies involved in the logistics chain. The ECJ ruling from 29.6.2017 reads as follows:

'Article 146(1)(e) of the VAT Directive must be interpreted as meaning that the exemption provided for in that provision does not apply to a supply of services, such as that at issue in the main proceedings, relating to a transaction involving the transport of goods to a non-member country, where the services in question are not provided directly to the consignor or consignee of those goods.

Carriers should therefore adapt their order documents and document as precisely as possible which goods they are transporting for their clients. Are the goods the property of the client or are they the property of a third party? This is crucial for assessing whether or not the VAT exemption can be claimed.

In the case of a so-called "mixed transport", i.e. if a client entrusts the service provider with the transport of both its own and third-party goods to the same recipient, the entire transport may be treated as subject to VAT for reasons of simplification.

In the event of incorrect handling, incorrect documents or incorrect invoicing, there are considerable risks, e.g. in the form of additional tax claims of 19% from the tax authorities on the service provider side or the denial of the input tax deduction in the corresponding amount on the client side. There may also be interest claims.

Accordingly, clients should also ensure that the invoices issued by their service providers are factually correct.

Any claims for repayment or additional payment are subject to the short limitation periods under transport law. According to § 439 HGB, this is generally one year, calculated from the respective date of transportation. Carsten Vyvers, ARNECKE SIBETH DABELSTEIN Rechtsanwälte Steuerberater Partnerschaftsgesellschaft mbB