VATPOSG3540 - Main rules: distance selling: delivered goods
As set out in VATPOSG3510, the distance selling rules are dependent upon whether the supply is of delivered goods. If the goods are not ‘delivered’ by or under the directions of the supplier then the Paragraph 29 conditions will not be met; instead we would have to look at whether Section 7(7) might apply (see VATPOSG3810).
Some businesses have sought to artificially split the supply of the goods from the delivery to avoid registering in other countries. Generally, this is achieved by offering the goods for sale and the consumer an ‘option’ to enter into a ‘separate’ delivery contract with a (often related) third party entity. This allows the business to claim that their supply was not of delivered goods so the place of supply remains the country of supply.
The EU VAT Committee issued a guideline that goods shall be considered to have been dispatched or transported by or on behalf of the supplier in any cases where the supplier intervenes directly or indirectly in the transport or dispatch of the goods.
The full text can be found on page 206 of the VAT Committee Guidelines.
This set out the following points.
The supplier shall be regarded as having intervened indirectly in the dispatch or transport of the goods in any of the following cases:
1 - where the transport or dispatch of the goods is subcontracted by the supplier to a third party who delivers the goods to the customer;
2 - where the dispatch or transport of the goods is provided by a third party but the supplier bears totally or partially the responsibility for the delivery of the goods to the customer;
3 - where the supplier invoices and collects the transport fees from the customer and further remits them to a third party that will arrange the dispatch or transport of the goods;
4 - the supplier actively promotes the delivery services of a third party to the customer, puts the customer and the third party in contact and provides to the third party the information needed for the delivery of the goods.
The guideline went on to confirm that goods shall not be considered to have been dispatched or transported by or on behalf of the supplier where:
5 - the customer transports the goods himself;
6 - the customer arranges the delivery of the goods with a third person and the supplier does not intervene directly or indirectly in providing or helping organising the dispatch or transport of those goods.
On 18 June 2020 the CJEU endorsed this approach in Krakvet (Case C276/18)
Article 33 of Directive 2006/112 must be interpreted as meaning that, when goods sold by a supplier established in one Member State to purchasers residing in another Member State are delivered to those purchasers by a company recommended by that supplier, but with which the purchasers are free to enter into a contract for the purpose of that delivery, those goods must be regarded as dispatched or transported ‘by or on behalf of the supplier’ where the role of that supplier is predominant in terms of initiating and organising the essential stages of the dispatch or transport of those goods, which it is for the referring court to ascertain, taking account of all the facts of the dispute in the main proceedings.