Lithuania refers export VAT third-party transport question to CJEU

The extended panel of Lietuvos vyriausiasis administracinis teismas ruled on 7 October 2026E TAR in case eA-104-789/2026E TAR, brought by UAB “Ramsiga”E TAR against Valstybinė mokesčių inspekcijaE TAR, that the proceedings are reopenedE TAR, two questions on Article 146(1)(b) of Council Directive 2006/112/EC are referred to the Court of Justice of the European UnionE TAR, and the case is stayed until the CJEU answersE TAR. The ruling is not subject to appeal, and as the court of last instance in administrative casesE TAR the court was obliged to refer under the third paragraph of Article 267 of the Treaty on the Functioning of the European UnionE TAR.

The dispute concerns a tax audit of the clothing-and-footwear wholesaler for 2017–2019. Under a cooperation agreement of 17 February 2017 (No 17/02-01, FCA Garliava), the company sold used clothing and footwear worth 1,558,879.58 euros under 23 VAT invoices to Absolute Export LP, a company registered in the United Kingdom holding a Latvian VAT code, applying the 0% VAT rateE TAR. Kauno apskrities valstybinė mokesčių inspekcija found the 0% rate unjustifiedE TAR for 8 invoices covering 633,534.68 euros, and by a decision of 21 November 2022 assessed 133,043 euros of VATE TAR plus 44,911.16 euros of late-payment interest and a 39,913-euro fine. Mokestinių ginčų komisija reduced the fine to 13,304 euros, noting the company’s cooperation and that no deliberate tax benefit had been established. The seller had declared the disputed supplies as intra-EU supplies; in fact the goods moved directly from Lithuania to BelarusE TAR.

The physical export is undisputedE TAR: export declarations named Absolute Export LP as exporter with a Belarusian consignee, CMR notes named Garliava as loading place and Minsk as unloading place, and IE599 export-completion certificates were issued. The obstacle is the transport chain. The carriers, Belarusian companies OOO “Monotransport” and ČTUP “TrakTurAvto”E TAR, acted on orders from, and were paid by, third partiesE TAR — Kensway Services Limited of Canada and Marconi Services LTD of Seychelles. The buyer later confirmed in writing on 23 May 2023 that it had ordered the transport through verbal orders to those intermediaries, but no transport orders or correspondence were produced. The buyer could not be found at its registration address, and it resold the goods for 71,479.08 euros, about 21.81 times less than the price it had paid.

Valstybinė mokesčių inspekcija maintains that in a chain of sales the 0% rate applies only in the link where a seller or buyer is also the person responsible for removing the goods from EU territoryE TAR. The court doubts whether Article 146(1)(b), implemented by Article 41(2) of Lietuvos Respublikos pridėtinės vertės mokesčio įstatymas, permits refusing the exemption on that ground alone, without assessing whether the buyer held the right to dispose of the goods as owner at removal, or whether the supplier knew of the third-party arrangement when it faces an a posteriori assessment.

The first referred question asks whether third-party involvement in organising transport defeats the exemption where export is undisputed and the buyer’s ownership is not deniedE TAR, and whether goods carried by hauliers engaged and paid by third parties count as dispatched by or on behalf of the buyerE TAR. The second asks whether a good-faith supplier may be assessed afterwards if the buyer did not dispose of the goods as owner at removal or the removal was not on the buyer’s behalf, unknown to the supplier — invoking fiscal neutrality, legal certainty and proportionalityE TAR.

Legal basis: Article 146(1)(b) of Council Directive 2006/112/EC, implemented by Article 41(2) of Lietuvos Respublikos pridėtinės vertės mokesčio įstatymasE TAR; NUTARTIS of Lietuvos vyriausiasis administracinis teismas of 7 October 2026 in case eA-104-789/2026.