07 July 2023

Joint statement: Call for pragmatic and consistent EU guidelines

Joint statement supporting petition N° 0276-2022 to retain the broad application of economic VAT exemption for transport and other services directly linked to export of goods.

Transport and, more generally, the supply chain industry is a cornerstone of the single market and European international trade. It is vital for fulfilling the free movement of individuals, services, and goods across borders. The cost and efficiency of the supply chain affect trade flows, mobility, and the global competitiveness of European companies in international trade.

Yet, significant regulatory barriers remain. Addressing these barriers is fundamental for more efficient interoperable transport solutions and mobility. The industry has recently witnessed a new barrier following an ECJ ruling (L.Č.’ IK, C-288/16 of 29 June 2017). Indeed, some Member States have started restricting the VAT exemption for transport services when exporting goods if the services are not invoiced to either the exporter or the importer.

We believe this interpretation by those Member States and the European Commission is legally inaccurate.  Not only has it been set aside by more recent case law, but it is also inconsistent with other EU regulations, namely the Union Customs code. Indeed, the wrong interpretation of the judgement, the EU guidelines, and the disharmonised implementation between the Member States creates not only a disproportionate administrative burden and costs for all stakeholders in the transport supply chain and for the Member States’ tax authorities but also significant legal uncertainty, particularly for many SMEs involved in this sector.

Support for a revision is given by the European Parliament where the Committee on Petitions together with the Economic and Monetary Affairs Committee invite the Member States to reconsider the guidelines in the EU’s VAT Committee, taking the most recent case law into account.

The 18 signatories of this letter, representing all modes and professions of the EU supply chain, want to express their support for the Petitions Committee dialogue with the Directorate-General Taxation and Customs Union to set a constructive dialogue with the transport industry and establish more practical guidelines restoring the full application of the economic exemption and levelling the global playing field for the EU industry.

We consequently invite the Member States and the European Commission to:

  • withdraw infringing Member State practices and reconsider their position in the VAT Committee, taking the most recent case law into account (Cartrans Spedition, C-495/17 of 8 November 2018). EU value added tax policy should assist and aim at achieving a well-functioning transport single market that also caters for the export of European businesses, reducing costs, strengthening EU value chains, and contributing to the EU’s global competitiveness.
  • withdraw and reconsider the infringing EU VAT Committee guidelines. The services provided in the ECJ ruling (L.Č.’ IK, C-288/16 of 29 June 2017) were not transport services but the supply of driver workforce. In a B2B environment, there is no additional revenue to be collected, and it brings additional complexity to the transport industry – and in a sector with no identified VAT fraud.
  • not charge VAT on the transportation of goods and other services directly linked to an export service throughout the full commercial chain, thereby limiting the VAT exemption to the final part of the chain – based only on contractual matters and not who is the carrier.
  • simplify and harmonize EU guidelines according to the Commission’s Regulatory Fitness and Performance (REFIT) programme by implementing Cartrans Spedition (C-495/17 of 8 November 2018) to achieve burden reduction, simplification and restore the economic exemption in all Member States.
  • consider the inconsistency of the restrictive definition taken by some Member States with the Union Customs Code, which clearly and undoubtedly links the carriers with the exports.

Simple EU guidelines in accordance with Cartrans will reduce the burden on industry and authorities alike, prevent the risk of tax disputes and tax uncertainty for the trade, secure harmonised implementation and transparency whilst de-risking possible VAT fraud (not existing to date), avoid high costs of implementation/management notably for SMEs, and avoid additional costs for European export trade passed on in the commercial chain which is detrimental to EU business’ global competitiveness.


The signatories

The European Community Shipowners’ Associations (ECSA), the International VAT Association (IVA), the International Air Transport Association (IATA), the Federation of European Private Port Companies and Terminals (FEPORT), European Shippers' Council (ESC), the European Community Association of Ship Brokers and Agents (ECASBA), the European Sea Ports Organisation (ESPO), European Association for Forwarding, Transport, Logistics and Customs Services (CLECAT), Danish Shipping, Swedish Shipowners’ Association, Royal Association of Netherlands’ Shipowners, Assarmatori, Confederation of Danish Industry (DI), Danish Chamber of Commerce, Danish Shipbrokers and Port Operators, Danske Speditører (Danish Freight Forwarders’ Association), Nordic Logistics Association, ITD (business association for transport and logistics companies).

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