CYIL vol. 13 (2022)

MARCELA HRADECKÁ CYIL 13 ȍ2022Ȏ the Extract from the Commercial Register, the verification of the VAT registration, the registration of the unreliable VAT payer, the mutual obligations of the contracting parties to submit documents for possible subsequent tax proceedings, such as the bill of lading, the handover report or the delivery note. The second phase of a triangular transaction refers to the delivery of goods between the intermediary and the purchaser. The intermediary declares the received taxable supply as a triangular deal in its value added tax return on line 30, and at the same time it shall indicate the taxable supply carried out in the triangular transaction regime on line 31. It shall not claim the value added tax in the tax return, and it shall not be obliged to remit the tax to its locally competent tax administrator either. At the same time, it is obliged to issue an ordinary tax document in which it is obliged to indicate, in addition to the usual statutory details, the specific place of the taxable supply in the purchaser’s Member State, the transport company, the plate registration number 20 of the transport vehicle, or other document markings, for example EKAER 21 used in Hungary. The purchaser is a person or entity buying the goods from an intermediary in the purchaser’s Member State. According to Council Directive 2006/112/EC, Article 141(d), the purchaser is the person designated to pay value added tax for the intermediary when the goods are supplied in that Member State. The purchaser is obliged to declare, in its tax return, the acquisition of the goods from another Member State, i.e., to indicate the output VAT in question and, if it uses the acquired goods for its economic activity, then it shall indicate also the entitlement to deduct the value added tax on the taxable supply received. Therefore, if all the conditions of triangular transactions required by the EU Directive are not met, then these international agreements should not be concluded at all, because they provide room for tax evasions. Another consequence of not complying with the concerned conditions of triangular transactions imposed by the EU Directive would be the obligation to get registered as a foreign VAT payer in the individual Member States where the taxable supply took place and to declare and pay value added tax in those Member States. The failure to comply with the required conditions for the fulfilment of the triangular transactions was dealt with by the Regional Court in Pilsen and subsequently by the Supreme Administrative Court [2 Afs 402/2017 – 37]. The Regional Court took the view that the conditions of triangular trade, pursuant to Section 17 of the VAT Act, were not fulfilled, on the grounds that one of the basic conditions is that the purchaser is the designated person to pay the value added tax for the intermediary in the supply of goods in the purchaser’s Member State. The Regional Court stated that it had not been established that the purchaser had declared the value added tax in its tax return and had paid the tax to its locally competent tax administrator. Thus, the conditions for this simplified procedure for the supply of goods were not fulfilled. The Regional Court also states that the purpose of such transactions is to facilitate trade and it must be insisted that, if the recipient fails to fulfil its tax obligations in the Member State in which the taxable supply took place, the tax must be paid by the intermediary, irrespective of the fact whether the intermediary could have influenced or foreseen the purchaser’s conduct.

20 Registration plate number of the transport vehicle. 21 EKAER – Electronic Public Road Trade Control System.

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