Case: export not “immediate”, administration refuses the exemption
The VAT export exemption applies to supplies of goods dispatched or transported by or on behalf of the seller to a place outside the European Union, and to supplies of goods dispatched or transported by or on behalf of a purchaser not established in Belgium to a place outside the European Union (Article 39, § 1, 1° and 2° Belgian VAT Code).
According to the VAT authorties, however, the exemption requires that the export be carried out “immediately” after the goods are made available and, in any event, within the time strictly necessary to transport the goods from the place where they are made available to the customs office of exit (Circular No. E.T.97.794 of 1 March 2001).
In the case leading to the judgment, the authorities refused the exemption for the export of a horse to the United States because the export took place more than six months after the purchase. The Antwerp Court of Appeal nevertheless held that this was not a ground to refuse the exemption, since neither the Belgian VAT Code nor Royal Decree No. 18 determines a time limit within which export must take place in order to claim the VAT exemption (Antwerp, 20 June 2023). The authorities lodged an appeal before the Belgian Supreme Court, but was unsuccessful.
Belgian Supreme Court: the tax authorities’ strict interpretation does not stand
The Court dismisses the appeal and confirms that the authorities cannot impose additional conditions without a legal basis. In its reasoning, the Court highlights four essential points.
1. No statutory time limit for export, not even implicitly
The Court expressly states that neither Article 39, § 1, 2° of the Belgian VAT Code nor the provisions of Royal Decree No. 18 impose a time limit within which, after the supply of the goods, export must be carried out.
Importantly, the Court also clarifies that such a time limit is not even implicitly contained in the chargeability rules. It explains that this is not implicit in Articles 14, 16 and 17 of the Belgian VAT Code, pursuant to which, for supplies of goods, the chargeable event occurs and the tax becomes chargeable at the time when the supply of the goods is made, because in the case of export there is no taxable supply and the export exemption neutralises the chargeable event.
2. “Immediate export” is not a legal requirement
The authorities argued that the VAT exemption can apply only if export takes place immediately after the goods are made available. The Court is brief and clear: that argument fails in law insofar as it claims that the export exemption can apply only if export is carried out immediately after the goods are made available.
3. EU case law: no requirement of a sufficient temporal and material link
The Court refers to Article 146(1)(b) of Directive 2006/112/EC and aligns itself with the judgment in BDV Hungary Trading (C-563/12, 19 December 2013). It emphasises that the Directive does not make the export exemption conditional on the exported goods having left the territory of the Union within a certain period.
In addition, the Court clarifies that EU case law does not require the taxable person, in order to benefit from the exemption, to demonstrate a sufficient temporal and material link between the time of supply and the time when the goods actually leave the territory of the Union. In other words, the mere passage of time cannot exclude the exemption, provided that the actual departure outside the Union is proven.
4. Circular E.T.97.794 cannot add conditions, principle of legality
The tax authorities relied on Circular No. E.T.97.794 of 1 March 2001, which prescribes “immediate” export for the exemption, or at least export within the strictly necessary transport period. The Antwerp Court of Appeal held that this circular adds a condition that is not included in Article 39 of the Belgian VAT Code or Royal Decree No. 18, meaning it cannot impose binding conditions. The Belgian Supreme Court confirms that making the exemption dependent on a requirement of immediate export, without a legal basis, breaches the principle of legality.
Commentary
The burden of proof for applying the VAT exemption lies with the taxable person applying the exemption. They must be able to demonstrate why no VAT is charged and that the legal conditions are met. In export cases, customs documents usually carry the greatest weight.
In audits, the authorities often apply a strict approach and refers to administrative guidelines to support additional conditions. This judgment confirms, however, that such guidelines cannot introduce conditions that are not anchored in the legislation.
For export transactions, the message is clear: the absence of “immediate” export, or the mere passage of time between supply and export, cannot in itself exclude the exemption. What remains decisive is that the goods have actually left the customs territory of the Union.
This judgment provides businesses with additional arguments to challenge unjustified VAT assessments where these are based solely on administrative circulars, without a legal basis in the VAT Code or Royal Decrees.