VAT and proof of transport in intra-Community transactions

VAT and proof of transport in intra-Community transactions

Proof of transport is essential for substantiating intra-Community transactions and avoiding VAT-related tax risks. Although a signed CMR consignment note is highly valuable, it may be supplemented by other documents demonstrating the dispatch, arrival, and receipt of the goods.

One issue that frequently gives rise to disputes during tax audits in intra-Community acquisitions of goods is proof of transport of the goods from one Member State to another. An invoice bearing an intra-Community VAT number and a declaration of the transaction on Form 349 (“recapitulative statement of intra-Community transactions”) are not sufficient if the physical movement and receipt of the goods cannot be substantiated.

This problem can particularly arise in cases where the company does not have a signed CMR consignment note or where the document exists but is incomplete. This is not uncommon in practice, as the reality is complex: external hauliers, logistics operators, collections, warehouse storage and partial deliveries are all involved, and this does not always clearly reflect the origin, destination and receipt of the goods.

Nevertheless, the total or partial absence of a CMR should not automatically negate the fact that the goods were transported. While it is true that the signed CMR is usually the most useful document due to its direct link to the transport and receipt of goods, it should not be regarded as the sole “essential” document. Rather, a solid body of evidence should be compiled, including purchase orders, signed delivery notes, transport contracts, logistics invoices, delivery confirmation emails, proof of payment, traceability records, warehouse documentation and statements from the purchaser. These should allow the dispatch, arrival and receipt of goods to be reasonably reconstructed.

The consequences of being unable to prove transport are significant. For example, the transaction may lose its status as an intra-Community supply. This means that, for the supplier, the supply may cease to be exempt from VAT at source. For the purchaser, the existence of a correctly declared intra-Community acquisition at destination may be called into question. This could lead to VAT adjustments, interest charges, penalties, and problems with deductibility if the documentation does not clearly identify the parties involved and the nature of the transaction.

Therefore, when it comes to intra-Community VAT, it is highly advisable to review internal documentation procedures in order to anticipate the requirements of an audit or routine check by the Tax Agency’s administrative bodies. Proof of transport should be retained from the moment the transaction takes place, not just when requested by the authorities. While economic reality should prevail, the absence of sufficient documentation to substantiate it may have consequences in VAT matters.