On 9 September 2026, the EU General Court ruled in Trading 4 (T-614/25) that three facts often relied on in chain transactions do not, in themselves, exempt the first supply.
The case
Between January 2016 and January 2017, a Latvian company supplied petroleum products under an excise duty suspension arrangement to undertakings registered in Estonia and the United Kingdom. On the same dates, they resold the goods to customers in other Member States. There was one transport, directly from the Latvian warehouse to the final customers. The Latvian company applied the 0% rate.
The Latvian tax authority took the view that ownership had passed to the final customers before transport began, and that the Latvian company knew this. It treated the supplies as domestic and taxed them at the standard rate.
The ruling
Where two successive supplies share one intra-Community transport, the transport can be ascribed to only one of them, and only that supply is exempt. This requires an overall assessment. A key question is when the second transfer of the right to dispose of the goods as owner took place. If that happened before the transport, the transport cannot be ascribed to the first supply.
The following circumstances do not, on their own, exempt the first supply:
- the goods moved under an excise duty suspension arrangement;
- the final customer in the third Member State is liable for the VAT in a triangular transaction;
- it is proved that the goods left the first Member State and were supplied in the third.
The simplification for triangular transactions concerns the intermediary, so it does not settle the position of the first supplier.
What to check
- If you sell to an intermediary that has already resold the goods, establish when the right to dispose of them passes along the chain.
- The rule in Article 36a, on ascribing the transport, did not apply here because the supplies took place before it was introduced. For later supplies, start from that article.
- Do not treat a transport document or an excise document as enough for the zero rate.
mr. J. el Khalfioui LL.M.