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Patchwork of national EU VAT rules must be stopped

Guidelines for the VAT exemption for the transport of goods outside the EU have not been updated and are also implemented differently across Europe. This creates hassle for carriers on land, sea, and air, which is why Danish Shipping raised the issue in the European Parliament's Committee on Petitions today.

When a product is transported outside the EU, it can be quite challenging to determine whether VAT should be paid or not.

The current guidelines have effectively removed the VAT exemption for the transport of goods, and this means a lot of hassle for all links in the transport chain, which now in several countries must first invoice VAT to its client who then apply for a refund.

Therefore, Danish Shipping appeared before the European Parliament's Committee on Petitions Monday 26 June, where the Danish Member of the European Parliament, Bergur Løkke Rasmussen from the Moderates, raised several questions regarding the possibility of revising the guidelines.

"It is completely absurd that companies have to spend time invoicing and then seek VAT reimbursement multiple times for each item they transport. It goes against the Commission's ambition to reduce unnecessary bureaucracy and, at the same time, it contributes to increasing the cost and complexity of European exports. We must change these guidelines," says Bergur Løkke Rasmussen.

The guidelines that removed the VAT exemption for transport were adopted following a ruling by the EU Court of Justice back in 2017. However, the guidelines do not take into account later judgments that facilitate export transport and maintain the VAT exemption.

Furthermore, the rules are implemented differently in various EU countries, resulting in total confusion.

"It should be in everyone's interest to clarify the rules so that we don't hinder ourselves when exporting goods outside the EU. It's also important to understand that the VAT exemption will not cost a penny since carriers can still seek reimbursement. Therefore, I am pleased that Bergur Løkke Rasmussen has helped to bring attention to the problem, and I hope and believe that our outcry today will have an effect," says Jacob K. Clasen, Deputy CEO of Danish Shipping.

The members of the European Parliament's Committee on Petitions confirmed the desire for a revision of the guidelines in the EU's VAT committee based on the unfortunate consequences of implementation and possible VAT fraud. The committee members invited to continue the dialogue when there is new information on the matter. The committee's position is not legally binding, which is why Danish Shipping does not expect the Commission itself to propose revised guidelines. Danish Shipping will follow closely whether today's meeting causes more Member States to raise the matter in the EU's VAT committee.