VAT-free export treatment allowed for vehicle sales driven out of the EU

The Finnish Central Tax Board (Keskusverolautakunta, KVL) has ruledVero that a dealer's sales of new and used vehicles to private individualsVero may be treated as VAT-free export sales under Article 146(1)(b) of the VAT DirectiveVero where the buyer transports the vehicle out of the EU after taking it over in FinlandVero. The ruling covers the fact pattern described in the applicationVero for the period 21 August 2026 to 31 December 2027Vero, and it is not yet final (Ei lainvoimainen)Vero.

The application concerned sales in which the company handed the vehicle over to the buyer in Finland after the purchase, with the buyer then responsible for moving it out of the EU — for example by driving it to Norway, or by taking it on a passenger ferry from Finland to another Member State such as Estonia, Germany or Sweden and transporting it onward out of the Union. The buyer's power of disposal over the vehicle passed at handover. The company delivered the vehicle on export or transfer plates, stated that consumption of the vehicle took place outside the EU, and could present an exit-confirmed release decision or other account of the export and of the vehicle's departure from the EU. The vehicle thus physically left the territory of the Union as a result of dispatch or transport.

In these circumstances the Board considered that the sale to a private individual met the conditions for Article 146(1)(b) established in the case law of the Court of Justice of the European UnionVero, where the supplier as transferor can show that the goods were dispatched or transported outside the EUVero. The fact that the transport was arranged by the buyer, who personally drove the vehicle out of the EU after the supply without otherwise using it in the territory of the Member States, did not in the circumstances of the application increase the risk of abuse compared with transport arranged through an independent carrier engaged by the buyerVero.

The Board interpreted Arvonlisäverolaki 70 §(1)(2)Vero so that the company's sale to a private individual met the conditions for a tax-free export sale laid down in that provisionVero where the vehicle was transported out of the EU after the supply without being driven in Member State territory other than the mandatory driving required by the transport itselfVero, and where the company could show sufficient and reliable evidence of the dispatch or transport of the vehicle outside the EUVero.

The ruling draws a firm line for one group of buyers. Where the customer was domiciled in Finland — a person with a kotipaikka or a permanent place of residence (vakituinen asuinpaikka) in Finland — the Board refused tax-free export treatment for the saleVero even where the vehicle was permanently transported out of the EU for use, for example, in the country of the person's holiday homeVero. Article 146(1)(b) covers only supplies of goods dispatched or transported outside the Community by or on behalf of an acquirer who is not established in the Member StateVero.

For dealers, the operative conditions are therefore threefold: the buyer must not be established in Finland, the vehicle must leave the EU without other use in the Member States beyond the driving the transport itself requires, and the seller must hold reliable proof of exit, such as an exit-confirmed release decisionVero. The Board cited the Court of Justice judgments in C-653/18 Unitel and C-602/24 W alongside the national provision.

Legal basis: Arvonlisäverolaki (1501/1993) 1 §(1)(1) and 70 §(1)(2); Council Directive 2006/112/EC, Article 146(1)(b)Vero; CJEU judgments C-653/18 and C-602/24.