Prepared by Stefano Luigi Airaghi and Federico Peterlini
With the Order dated 8 October 2020, related to cause C-621/19 (Weindel Logistik Service), the ECJ, by reaffirming the principles already expressed in previous decisions on the same topic (ex multis, decision dated 14 September 2017, cause C-132/16, Iberdrola and decision dated 25 June 2015, cause C-187/14, DSV Road A/S), expressed itself on import VAT recoverability for the importer that is not the owner of the imported goods.
In particular, the case discussed in the Order refers to Weindel Logistik Service, a Slovak company active in the field of reconditioning services that, during the course of its business activity, imported in Slovakia some goods to be reconditioned which remained in the ownership of its Swiss client.
Once imported, the goods have been repacked in Slovakia by Weindel Logistik Service and delivered in other EU Member States or exported to third countries.
The invoices issued by Weindel Logistik Service to its Swiss client have been issued only with reference to the repacking services provided and not also to the imported goods.
In such circumstances, albeit readdressing to the national court the duty to ascertain whether Weindel Logistik Service effectively intervened only as a supplier of services without having acquired the imported goods or borne the cost of importation, with the Order under discussion the ECJ confirmed that Directive 2006/112 must be interpreted as precluding the right to deduct VAT to an importer where he does not dispose of the goods in the same way as an owner and where the input import costs are non-existent or are not incorporated in the price of the particular output transactions or in the price of the goods and services supplied by the taxable person in the course of his economic activities.
From an Italian point of view, it is worth to point out that in the past, in more than one occasion, the Italian tax authorities granted the right to deduct import VAT on goods not owned by the importer where a direct and immediate link between the upstream import and the downstream activity carried out by the importer not owning the goods was detected (in particular, see resolutions n. 96/E/2007 and n. 346/E/2008 and reply to ruling n. 6, dated 11 January 2019). The clarifications provided by the Italian tax authorities are substantially aligned with the recent ECJ case-law.
In the light of the above, in order to properly evaluate the possible impacts in terms of VAT deduction in case of imports not carried out by the owner of the goods, and in particular when the importer acts as service provider (i.e. “toll manufacturer”), it is recommendable to carry out an accurate analysis of the characteristics of the transaction and ascertain if the conditions required for the VAT deduction are met or not according to all the clarifications provided so far.
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