C-245/04 EMAG Handel Eder

JUDGMENT OF THE COURT (First Chamber)

6 April 2006 *

In Case C-245/04,

REFERENCE for a preliminary ruling under Article 234 EC from the Verwaltungsgerichtshof (Austria), made by decision of 26 May 2004, received at the Court on 10 June 2004, in the proceedings

EMAG Handel Eder OHG

v

Finanzlandesdirektion für Kärnten,

THE COURT (First Chamber),

composed of P. Jann, President of the Chamber, K. Schiemann, N. Colneric, M. Ilešič (Rapporteur) and E. Levits, Judges,

* Language of the case: German.

Advocate General: J. Kokott, Registrar: B. Fülöp, Administrator,

having regard to the written procedure and further to the hearing on 27 October 2005,

after considering the observations submitted on behalf of:

— EMAG Handel Eder OHG, by W. Dellacher, Rechtsanwalt, assisted by A. Breschan, Wirtschaftsprüfer,

— the Austrian Government, by H. Dossi, acting as Agent,

— the Italian Government, by I.M. Braguglia, acting as Agent, assisted by G. De Bellis and G. Fiengo, avvocati dello Stato,

— the Government of the United Kingdom of Great Britain and Northern Ireland, by C. Jackson and S. Nwaokolo, acting as Agents, assisted by M. Angiolini, barrister,

— the Commission of the European Communities, by D. Triantafyllou and K. Gross, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 10 November 2005, gives the following

Judgment

Grounds

1This reference for a preliminary ruling concerns the interpretation of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p.1), as amended by Council Directive 95/7/EC of 10 April 1995 (OJ 1995 L 102, p. 18) (‘the Sixth Directive’), and in particular Article 8(1) thereof, relating to the place of supply of goods.

2The reference arose in the course of proceedings between EMAG Handel Eder OHG (‘EMAG’), established in Austria, and the Finanzlandesdirektion für Kärnten (the Carinthia Regional Tax Authority) concerning the deduction by EMAG of value added tax (‘VAT’) paid by way of input tax.

Legal context

The SixthDirective

3Article 2(1) of the Sixth Directive provides that: ‘(t)he following shall be subject to value added tax ... the supply of goods … effected for consideration within the territory of the country by a taxable person acting as such’.

4Under Article 5(1) of the Sixth Directive, ‘“Supply of goods” shall mean the transfer of the right to dispose of tangible property as owner’.

5Article 8 of the Sixth Directive, which is in Title VI thereof, entitled ‘Place of taxable transactions’, provides in subparagraphs 1(a) and (b):

‘The place of supply of goods shall be deemed to be:

(a) in the case of goods dispatched or transported either by the supplier or by the person to whom they are supplied or by a third person: the place where the goods are at the time when dispatch or transport to the person to whom they are supplied begins …

(b) in the case of goods not dispatched or transported: the place where the goods are when the supply takes place’.

6Title XVIa, entitled ‘Transitional arrangements for the taxation of trade between Member States’, was added to the Sixth Directive by Council Directive 91/680/EEC of 16 December 1991 supplementing the common system of value added tax and amending Directive 77/388/EEC with a view to the abolition of fiscal frontiers (OJ 1991 L 376, p. 1) and contains Articles 28a to 28m.

7Article 28a of the Sixth Directive provides:

‘1. The following shall also be subject to value added tax:

(a) intra-Community acquisitions of goods for consideration within the territory of the country by a taxable person acting as such or by a non-taxable legal person where the vendor is a taxable person acting as such who is not eligible for the tax exemption provided for in Article 24 … .

…

…

3. “Intra-Community acquisition of goods” shall mean acquisition of the right to dispose as owner of movable tangible property dispatched or transported to the person acquiring the goods by or on behalf of the vendor or the person acquiring the goods to a Member State other than that from which the goods are dispatched or transported.

… been classed as ‘‘supplies of goods” as defined in … Article 5 if they had been carried out within the territory of the country by a taxable person acting as such are classed as ‘‘intra-Community acquisitions of goods”’.

8Article 28bA(1) of the Sixth Directive provides:

‘The place of the intra-Community acquisition of goods shall be deemed to be the place where the goods are at the time when dispatch or transport to the person acquiring them ends’.

9The first subparagraph of Article 28c(a) states:

‘Without prejudice to other Community provisions and subject to conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of the exemptions provided for below and preventing any evasion, avoidance or abuse, Member States shall exempt:

(a) supplies of goods, as defined in Articles 5 and 28a(5)(a), dispatched or transported by or on behalf of the vendor or the person acquiring the goods out of the territory referred to in Article 3 but within the Community, effected for another taxable person or a non-taxable legal person acting as such in a Member State other than that of the departure of the dispatch or transport of the goods’.

10Article 17(2)(a) and (d) and (3)(b) of the Sixth Directive, as amended by Article 28f(1) of that directive, provides:

‘2. In so far as the goods … are used for the purposes of his taxable transactions, the taxable person shall be entitled to deduct from the tax which he is liable to pay:

(a) value added tax due or paid in respect of goods or services supplied or to be supplied to him by another taxable person liable for the tax within the territory of the country;

…

(d) value added tax due pursuant to Article 28a(1)(a).

3. Member States shall also grant every taxable person the right to the deduction or refund of the value added tax referred to in paragraph 2 in so far as the goods … are used for the purposes of:

…

(b) transactions which are exempt pursuant to Article … 28c(A)’.

Nationallegislation

11Paragraph 3(1), (7) and (8) of the Umsatzsteuergesetz (Austrian Law on Turnover Tax) 1994 (‘the UStG 1994’), in the version in force at the material time, provides:

‘1. “Supplies” are transactions in which an undertaking transfers to a customer or a third party authorised on his behalf the right to dispose of goods in his own name. The right to dispose of the goods may be procured by the undertaking itself or by a third party on its behalf.

…

7. The place of supply of goods is the place where the goods are located at the time when the power to dispose of them is procured.

8. If there is a supply of goods which are transported or dispatched to the customer or to a third party authorised on his behalf, the supply is to be treated as taking place at the time when the transport of the goods begins or at the time when they are handed over to the forwarding agent, carrier or shipper. Goods are dispatched where the undertaking instructs a carrier or shipper to transport them to a third party or entrusts such transport to a forwarding agent’.

12Paragraph 3(8) was amended by the Steuerreformgesetz (Law on Tax Reform) 2000 (BGB1. I 106/1999) in order, according to the official explanatory notes, to comply with Article 8(1)(a) of the Sixth Directive, and is now worded as follows:

‘If there is a supply of goods which are transported or dispatched by the supplier or customer, the place of supply of the goods shall be treated as being the place where the transport or dispatch to the customer or a third person on his behalf begins. Goods are dispatched when they are transported by a carrier or shipper or such transport is entrusted to a forwarding agent. Dispatch begins at the time when the goods are handed over to the forwarding agent, carrier or shipper’.

13Paragraph 12(1)(1) of the UStG 1994, which sets out the relevant provisions relating to deduction of input VAT, provides:

‘An undertaking may deduct the following amounts in input tax:

(1) Tax which has been included as a separate charge in invoices (Paragraph 11) from other undertakings in respect of supplies made within the territory of the Republic of Austria for the benefit of the undertaking …’.

The dispute in the main proceedings and the questions referred for a preliminary ruling

14In 1996 and 1997, EMAG obtained non-ferrous metals from K GmbH (‘K’), which was also established in Austria.

15K itself acquired the goods concerned from suppliers in Italy or the Netherlands (‘the suppliers’). It is not disputed that EMAG did not know who K's suppliers were. After each transaction was concluded, K instructed its suppliers to hand over those goods to a forwarding agent it had engaged to deliver those goods by lorry directly either to EMAG's premises in Austria or to those of EMAG's customers, also in Austria, in accordance with the instructions given to K by EMAG.

16K invoiced EMAG the agreed purchase price of the goods and added Austrian VAT at the rate of 20%. EMAG subsequently claimed deduction of that tax as input VAT.

17The competent Finanzamt (tax office) and, subsequently, the Carinthia Regional Tax Authority refused to allow that deduction on the ground that K had been wrong to include VAT in the invoice to EMAG. The latter brought an appeal before the Verwaltungsgerichtshof (Higher Administrative Court).

18EMAG argues that Paragraph 3(8) of the UStG 1994 did not apply to supplies effected on its behalf by K since the instruction to despatch the goods to Austria was not given by it but by K. It points out that it was not aware of the identity of K's suppliers, that the latter was entitled to change the place of destination or the recipient at any time before relevant supply had been made and occasionally took advantage of that option, and that it was K that bore all the risk of loss or damage to the goods until they had been accepted by EMAG or one of its clients.

19EMAG therefore considers that the place of the supply of goods effected on its behalf by K was in Austria so that K was liable to Austrian VAT in respect of those supplies. K was therefore fully entitled to include that VAT in the invoice to EMAG and EMAG itself was entitled to claim deduction of it as input VAT.

20According to the Regional Tax Authority, initially, K paid its suppliers for the goods, which placed them at K's disposal in the Netherlands or in Italy. Subsequently, K instructed a forwarding agent to be responsible for the carriage of goods from Italy or the Netherlands to Austria, where they were delivered to EMAG or, on its instructions, to its customers. The Regional Tax Authority points out that K effected the carriage of the goods in order to satisfy its obligation to supply the goods to EMAG and that the latter was aware of this.

21In those circumstances, the Regional Tax Authority considers that Paragraph 3(8) of the UStG 1994 was applicable to the supplies made by K to EMAG. As the handing over of the goods to forwarding agents instructed by K took place in Italy or the Netherlands, the relevant place of the supplies effected by K on EMAG's behalf was in one or other of those Member States, in accordance with that provision. Under Paragraph 12(1)(1) of the UStG 1994, input VAT could have been deducted only if the transactions covered by the invoice had taken place in Austria. Since all the transactions took place in Italy or the Netherlands, it was unlawful for EMAG to deduct input VAT.

22The national court found that, in the case pending before it, two separate supplies were implemented by a single physical movement of goods.

23It takes the view that, under Article 8(1)(a) of the Sixth Directive, the place of the first supply of goods effected by the Italian or Dutch suppliers on behalf of K is the place where those goods were at the time when the dispatch or transport began, namely in Italy or the Netherlands. On the other hand, the place of the second supply, effected by K on behalf of EMAG, remains open to question.

24In that regard, the national court considers that the wording of the first sentence of Article 8(1)(a) of the Sixth Directive does not provide any assistance in determining whether the intra-Community movement of goods is to be ascribed to the first supply alone or whether it can be ascribed to both supplies equally. In the second case, it questions whether the place of the second supply, effected by K on behalf of EMAG, is the actual place of departure of the goods (that is, in the main proceedings, Italy or the Netherlands) or the place where the first supply ended (that is, in the main proceedings, Austria).

25It was in those circumstances that the Higher Administrative Court decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling:

(1) Is the first sentence of Article 8(1)(a) of the Sixth Council Directive … to be interpreted as meaning that the place where dispatch or transport begins is relevant even when several undertakings enter into arrangements for the supply of the same goods and those arrangements are implemented by way of a single movement of goods?

(2) Are successive supplies to be treated as exempted intra-Community supplies when several undertakings enter into arrangements for the supply of the same goods and those arrangements are implemented by way of a single movement of goods?

(3) If the answer to the first question is in the affirmative, is the place at which the second supply begins the actual place of departure of the goods or the place where the first supply finishes?

(4) Is the identity of the party having the right of disposal of the goods during their movement a relevant factor in answering the first, second and third questions?

Preliminary observations

26First of all, it should be noted that under Directive 91/680, intended to achieve the elimination of fiscal barriers between Member States, the Community legislature definitively abolished the imposition of tax on imports and the remission of tax on exports in trade between Member States with effect from 1 January 1993 (second and third recitals in the preamble to that directive).

27However, the Community legislature stated that conditions could not be brought about by that date that would permit the principle of the taxation in the Member State of origin of goods and services supplied to be implemented without prejudicing, as regards Community trade between taxable persons, the principle that tax revenue from the imposition of tax at the final consumption stage should accrue to the benefit of the Member State in which the final consumption takes place. It therefore introduced, under Title XVIa of the Sixth Directive, transitional arrangements for the taxation of trade between Member States, based on a new chargeable event, namely the intra-Community acquisition of goods (seventh to tenth recitals in the preamble to Directive 91/680).

28The first subparagraph of Article 28a(1)(a) of the Sixth Directive provides that, under certain circumstances,‘intra-Community acquisitions of goods for consideration within the territory of the country by a taxable person acting as such or by a non-taxable legal person where the vendor is a taxable person acting as such are to be subject to VAT’. ‘Intra-Community acquisition of goods’ is defined in the first subparagraph of paragraph 3 of that article as ‘(the) acquisition of the right to dispose as owner of movable tangible property dispatched or transported to the person acquiring the goods by or on behalf of the vendor or the person acquiring the goods to a Member State other than that from which the goods are dispatched or transported’.

29As the Advocate General pointed out at points 23 to 25 of her Opinion, any intraCommunity acquisition that is taxed in the Member State where the dispatch or intra-Community transport of goods ends under the first subparagraph of Article 28a(1)(a) has, as a corollary, an exempted supply in the Member State in which that dispatch or transport began under the first subparagraph of Article 28c(A)(a) of that directive.

30Under the transitional arrangements laid down in Title XVIa of the Sixth Directive, firstly, the vendor effects an exempted supply in the Member State of the departure of the dispatch or intra-Community transport of the goods in accordance with Article 8(1)(a) and the first subparagraph of Article 28c(A)(a) of that directive and, then, is granted by that Member State a deduction or refund of the VAT due or paid as input tax in that Member State in respect of those goods under Article 17(3)(b) of that directive, as amended by Article 28f(1) of that directive. For his part, the person acquiring the goods makes an intra-Community acquisition that is taxed in the Member State in which that dispatch or intra-Community transport ends under the first subparagraph of Article 28a(1)(a) and Article 28b(A)(1) of the Sixth Directive.

31That mechanism enables the tax revenue to be transferred to the Member State in which final consumption of the goods supplied takes place.

Questions 2 and 4 referred for a preliminary ruling

32By its second and fourth questions, which it is appropriate to consider together, the national court asks, in essence, whether, where two successive supplies of the same goods, effected for consideration between taxable persons acting as such, gives rise to a single intra-Community dispatch or a single intra-Community transport of those goods, both those supplies may constitute exempted supplies under the first subparagraph of Article 28c(A)(a) of the Sixth Directive and whether the identity of the person having the right to dispose of the goods during dispatch or transport, be it the first vendor, the intermediary acquiring the goods or the second person acquiring the goods, is a relevant factor in answering that question.

33In a situation such as that at issue in the main proceedings, the two successive supplies could be exempted under the first subparagraph of Article 28c(A)(a) of the Sixth Directive only if the single intra-Community movement of goods were ascribed to both supplies equally.

34If that were the case, there would be the following consequences.

35Firstly, under Article 8(1)(a) of the Sixth Directive, the first vendor would effect a first supply in the Member State of the departure of the dispatch or transport of the goods. That first supply would be mirrored by a first intra-Community acquisition made by the intermediary acquiring the goods, situated, in accordance with Article 28b(A)(1), in the Member State of arrival of the dispatch or transport of the goods.

36Next, the intermediary acquiring the goods would himself effect a second supply, also, under Article 8(1)(a) of the Sixth Directive, in the Member State of departure, that second supply in turn being mirrored by a second intra-Community acquisition by the second person acquiring the goods in the Member State of arrival.

37Such a supply chain would be both illogical and contrary to the scheme of the transitional arrangements for the taxation of trade between Member States as described at paragraphs 26 to 31 above.

38Firstly, even if two successive supplies give rise only to a single movement of goods, they must be regarded as having followed each other in time. The intermediary acquiring the goods can transfer the right to dispose of the goods as owner to the second person acquiring the goods only if it has previously been transferred to him by the first vendor and, therefore, the second supply can take place only after the first supply has been effected.

39As the place of acquisition of the goods by the intermediary is deemed to be in the Member State of arrival of the dispatch or transport of those goods, it would be illogical for that taxable person to be deemed to have made the subsequent supply of those same goods from the Member State of the departure of that dispatch or transport.

40Secondly, if the relevant provisions of the Sixth Directive are interpreted as meaning that the single intra-Community movement of goods is ascribed to only one of the two successive supplies, the purpose of the transitional arrangements under Title XVIa of that directive, namely to transfer the tax revenue to the Member State in which final consumption of the goods supplied takes place, can be easily attained. That transfer in fact occurs by means of the single transaction giving rise to an intraCommunity movement of goods under the first subparagraph of Article 28c(A)(a) (exemption by the Member State of departure of the intra-Community dispatch or transport) in conjunction with Article 17(3)(b), as amended by Article 28f(1) (deduction or reimbursement by the Member State of departure of the VAT due or paid by way of input tax in that Member State), and the first subparagraph of Article 28a(1)(a) (taxation by the Member State of arrival of the intra-Community acquisition) of the Sixth Directive. That mechanism makes it possible to delimit clearly the authority to tax of the Member States concerned.

41By contrast, the relevant provisions of the Sixth Directive cannot be interpreted as meaning that the single intra-Community movement of goods must be ascribed to both successive supplies equally.

42Indeed, to ascribe the single intra-Community movement of goods also to the second intra-Community transaction would not have the effect of transferring the tax revenue to the Member State where final consumption of the goods supplied takes place, since that transfer has already occurred at the end of the first transaction, as was pointed out in paragraph 40 above.

43Furthermore, it should be pointed out that if the single intra-Community movement of goods were ascribed to both successive supplies, Article 17(3)(b) of the Sixth Directive, as amended by Article 28f(1) of that directive, which is an essential provision of that system for the purposes of transferring tax revenue, would not serve any purpose as regards the second supply effected by the intermediary acquiring the goods since, necessarily, the latter would not have paid any input VAT in the Member State of the departure of the dispatch or intra-Community transport of the goods.

44Moreover, in order to avoid the risk of tax loss, Council Regulation (EEC) No 218/92 of 27 January 1992 on administrative cooperation in the field of indirect taxation (VAT) (OJ 1992 L 24, p. 1) — replaced as from 1 January 2004 by Council Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in the field of value added tax and repealing Regulation (EEC) No 218/92 (OJ 2003 L 264, p. 1) — provided for a common system for the exchange of information on intraCommunity transactions between the competent authorities of the Member States. The effect of the interpretation set out at paragraph 41 above would thus be to multiply the number of cases requiring such an exchange of information and, therefore, make the treatment of the transactions concerned by the competent tax authorities more cumbersome.

45The answer to the second and fourth questions must therefore be that, where two successive supplies of the same goods, effected for consideration between taxable persons acting as such, gives rise to a single intra-Community dispatch or a single intra-Community transport of those goods, that dispatch or transport can be ascribed to only one of the two supplies, which alone will be exempted from tax under the first subparagraph of Article 28c(A)(a) of the Sixth Directive. That interpretation holds good regardless of which taxable person — the first vendor, the intermediary acquiring the goods or the second person acquiring the goods — has the right to dispose of the goods during that dispatch or transport.

Question 1

46The first point to be made with regard to the determination of the place where the supply is deemed to take place is that the Sixth Directive makes no distinction between ‘intra-Community’ supplies and ‘internal’ supplies. Article 8(1) of that directive makes a distinction only between supplies in which goods are dispatched or transported (subparagraph (a)), those in which goods are not dispatched or transported (subparagraph (b)) and those effected on board ships, aircraft or trains during the part of a transport of passengers effected within the Community (subparagraph (c)), the latter situation being irrelevant to the case in the main proceedings.

47It follows from the answer to the second and fourth questions that, in a situation such as that at issue in the main proceedings, the single intra-Community movement of goods can be ascribed to only one of the two successive supplies.

48In accordance with Article 8(1)(a) of the Sixth Directive, the place of that supply is deemed to be in the Member State of the departure of the dispatch or transport of the goods.

49As the other supply does not involve dispatch or transport, the place of that supply is deemed, under Article 8(1)(b) of the Sixth Directive, to be the place where the goods are when that supply takes place.

50If the first of the two successive supplies is the supply which involves intraCommunity dispatch or transport of goods and which, therefore, has as a corollary an intra-Community acquisition taxed in the Member State of arrival of that dispatch or transport, the second supply is deemed to occur in the place of the intraCommunity acquisition preceding it, that is, in the Member State of arrival. Conversely, if the supply involving intra-Community dispatch or transport of goods is the second of the two successive supplies, the first supply, which, necessarily, occurred before the goods were dispatched or transported, is deemed to occur in the Member State of the departure of that dispatch or transport.

51The answer to the first question must therefore be that only the place of the supply which gives rise to dispatch or intra-Community transport of goods is determined in accordance with Article 8(1)(a) of the Sixth Directive; that place is deemed to be in the Member State of the departure of that dispatch or transport. The place of the other supply is determined in accordance with Article 8(1)(b) of that directive; that place is deemed to be either in the Member State of departure or in the Member State of arrival of that dispatch or transport, according to whether that supply is the first or the second of the two successive supplies.

Question 3

52In light of the answer given to the first question, there is no need to answer the second question.

Costs

Costs

53Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (First Chamber) hereby rules:

1. Where two successive supplies of the same goods, effected for consideration between taxable persons acting as such, gives rise to a single intraCommunity dispatch or a single intra-Community transport of those goods, that dispatch or transport can be ascribed to only one of the two supplies, which alone will be exempted from tax under the first subparagraph of Article 28c(A)(a) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, as amended by Council Directive 95/7/EC of 10 April 1995.

That interpretation holds good regardless of which taxable person — the first vendor, the intermediary acquiring the goods or the second person acquiring the goods — has the right to dispose of the goods during that dispatch or transport.

2. Only the place of the supply which gives rise to dispatch or intra-Community transport of goods is determined in accordance with Article 8 (1)(a) of the Sixth Directive 77/388/EEC, as amended by Directive 95/7; that place is deemed to be in the Member State of the departure of that dispatch or transport. The place of the other supply is determined in accordance with Article 8(1)(b) of that directive; that place is deemed to be either in the Member State of departure or in the Member State of arrival of that dispatch or transport, according to whether that supply is the first or the second of the two successive supplies.

[Signatures]

Notes

(7) . Member States shall take measures to ensure that transactions which would have

OPINION OF ADVOCATE GENERAL KOKOTT delivered on 10 November 2005 1

I — Introduction

1In the present case, questions have been referred on the interpretation of the Sixth Council Directive 77/388/EEC of 17 May

Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment2 (the ‘Sixth Directive’) as regards the taxation of so-called ‘chain transactions’. In such transactions several undertakings from two or more Member States successively conclude contracts for the purchase of the same goods which are then performed by means of a single transfer of goods from the first supplier to the last customer.

2In the main proceedings before the Verwaltungsgerichtshof (Higher Administrative Court), Austria, the end customer in a chain transaction is in dispute with the tax office over the recognition, for purposes of input tax deduction, of the value added tax paid to the intermediate undertaking. Taxable domestic supplies, but not tax-exempt intra-Community (cross-border) supplies, are eligible for deduction of input tax. The tax office takes the view that the parties wrongly treated the supply to the end customer as a taxable domestic supply.

II — Legal framework

A — Community law

3According to Article 2 of the Sixth Directive, the supply of goods is subject to value added tax, and the taxable person, under Article 4(1) and (2), is the independent trader who effects the supply.

4As regards the determination of the place of the taxable activity, Article 8 provides as follows:

‘(1) The place of supply of goods shall be deemed to be:

(a) in the case of goods dispatched or transported either by the supplier or by the person to whom they are supplied or by a third person: the place where the goods are at the time when dispatch or transport to the person to whom they are supplied begins. …;

(b) in the case of goods not dispatched or transported: the place where the goods are when the supply takes place;

…

(2) By way of derogation from paragraph 1 (a), where the place of departure of the consignment or transport of goods is in a country other than the country of import of those goods, the place of the supply by the importer within the meaning of Article 21(2) and the place of any subsequent supplies shall be deemed to be within the country of import of the goods.’

5Council Directive 91/680 of 16 December 1991 3 inserted a new Title XVIa (Transitional arrangements for the taxation of trade between Member States; Article 28a to 28m) in the Sixth Directive. These provisions still apply, since so far no definitive rules on the taxation of the movement of goods between undertakings in trade between Member States have been enacted.

6Article 28(a) of the Sixth Directive reads, in part, as follows:

‘1. The following shall also be subject to value added tax:

(a) intra-Community acquisitions of goods for consideration within the territory of the country by a taxable person acting as such or by a non-taxable legal person where the vendor is a taxable person acting as such who is not eligible for the tax exemption provided for in Article 24 and who is not covered by the arrangements laid down in the second sentence of Article 8(1)(a) or in Article 28b(B)(1).

…

3. “Intra-Community acquisition of goods” shall mean acquisition of the right to dispose as owner of movable tangible property dispatched or transported to the person acquiring the goods by or on behalf of the vendor or the person acquiring the goods to a Member State other than that from which the goods are dispatched or transported.’

7Article 28b(A) of the Sixth Directive defines the place of acquisition. This provision reads, in part:

‘(1) The place of the intra-Community acquisition of goods shall be deemed to be the place where the goods are at the time when dispatch or transport to the person acquiring them ends.

(2) Without prejudice to paragraph 1, the place of the intra-Community acquisition of goods referred to in Article 28a(1)(a) shall, however, be deemed to be within the territory of the Member State which issued the value added tax identification number under which the person acquiring the goods made the acquisition, unless the person acquiring the goods establishes that that acquisition has been subject to tax in accordance with paragraph 1.

...'

8Under Article 28c(A) of the Sixth Directive intra-Community supplies between two Member States are exempt from tax. That provision reads, in part, as follows:

‘Without prejudice to other Community provisions and subject to conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of the exemptions provided for below and preventing any evasion, avoidance or abuse, Member States shall exempt:

(a) supplies of goods, as defined in Articles 5 and 28a(5)(a), dispatched or transported by or on behalf of the vendor or the person acquiring the goods out of the territory referred to in Article 3 but within the Community, effected for another taxable person or a non-taxable legal person acting as such in a Member State other than that of the departure of the dispatch or transport of the goods.

...'

B — Nationallaw

9The national provisions relevant to the main proceedings are those of the Umsatzsteuergesetz (Austrian Law on Turnover Tax) 1994 in the version that preceded the Steuerreformgesetz (Law on Tax Reform) 2000 4 (the ‘UStG 1994’).

10Paragraph 3(1), (7) and (8) of the UStG 1994 states:

'(1) “supplies” are transactions in which an undertaking transfers to a customer or a third party authorised on his behalf the right to dispose of goods in his own name. The right to dispose of the goods may be procured by the undertaking itself or by a third party on its behalf.

…

(7) The place of supply of goods is the place where the goods are located at the time when the power to dispose of them is procured.

(8) If there is a supply of goods which are transported or dispatched to the customer or to a third party authorised on his behalf, the supply is to be treated as taking place at the time when the transport of the goods begins or at the time when they are handed over to the forwarding agent, carrier or shipper. Goods are dispatched where the undertaking instructs a carrier or shipper to transport them to a third party or entrusts such transport to a forwarding agent.’

11The Steuerreformgesetz 2000 amended Paragraph 3(8) of the UStG 1994 — according to the official explanatory notes, in order to comply with Article 8(1)(a) of the Sixth Directive — and since then it has read as follows:

‘If there is a supply of goods which are transported or dispatched by the supplier or customer, the place of supply of the goods shall be treated as being the place where the transport or dispatch to the customer or a third person on his behalf begins. Goods are dispatched when they are transported by a carrier or shipper or such a transport is entrusted to a forwarding agent. Dispatch begins at the time when the goods are handed over to the forwarding agent, carrier or shipper.’

12Paragraph 12 of the UStG 1994, which sets out the relevant provisions relating to deduction of input tax, provides:

‘(1) An undertaking may deduct the following amounts in input tax:

1. Tax which has been included as a separate charge in invoices (Paragraph 11) from other undertakings in respect of supplies made within the territory of the Republic of Austria for the benefit of the undertaking. …’

III — Facts and questions referred for a preliminary ruling

13During 1996 and 1997, under annual contracts, the Austrian company K GmbH sold each month a certain quantity of ‘Hütte’ soft lead ‘free at Arnoldstein, EC customs duty paid, carriage duty paid’ to the applicant in the main proceedings, EMAG Handel Eder OHG, Klagenfurt. For its part, K had acquired the soft lead from companies established in Italy and the Netherlands. In each case, the goods were stored in customs warehouses in Rotterdam or Trieste. From there they were shipped by a forwarding agent, on K's instructions, to the specified destination at EMAG or one of EMAG's customers. In its invoices for the supplies, K charged EMAG value added tax at the rate of 20%. However, the tax office refused to allow EMAG to deduct the input tax. In its opinion, K had been wrong to include value added tax in the invoice, since in view of the fact that the goods had been transported to EMAG from Italy or the Netherlands the transaction had to be regarded as a taxexempt intra-Community supply.

14EMAG appealed against this decision, arguing that it was only on K's instructions that the forwarding agent dispatched the goods from Italy or the Netherlands to Austria. Therefore there was a supply from another Member State only as between K and its supplier. The subsequent supply from K to EMAG, on the other hand, was a taxable domestic supply so that the deduction of input tax should be allowed.

15The Carinthia Tax Authority dismissed EMAG's appeal as unfounded. In its view, under Paragraph 3(8) of the UStG 1994 the when several undertakings enter into arrangements for the supply of the same goods and those arrangements are implemented by way of a single movement of goods?

place for the tax-exempt intra-Community 2. Are successive supplies to be treated as supplies was in the Netherlands or in Italy, as the case might be, since the goods had been handed over to the carriers in Rotterdam or Trieste and transported by the latter to EMAG in Austria.

16This decision of the Carinthia Tax Authority is the subject of the proceedings before the Verwaltungsgerichtshof. The Verexempted intra-Community supplies when several undertakings enter into arrangements for the supply of the same goods and those arrangements are implemented by way of a single movement of goods?

waltungsgerichtshof has referred the follow 3. If the answer to the first question is in ing questions to the Court for a preliminary ruling:

1. Is the first sentence of Article 8(1)(a) of the Sixth Council Directive of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnthe affirmative, is the place at which the second supply begins the actual place of departure of the goods or the place where the first supply finishes?

over taxes — Common system of value 4. Is the identity of the party having the added tax: uniform basis of assessment (77/388/EEC) to be interpreted as meaning that the place where dispatch or transport begins is relevant even right of disposal of the goods during their movement a relevant factor in answering the first, second and third questions?

IV — Arguments of the parties

17In the proceedings before the Court of Justice, EMAG, the Austrian, United Kingdom and Italian Governments and the Commission have all submitted observations. The parties are all of the opinion that in chain transactions only one supply can be regarded as a tax-exempt intra-Community supply. Moreover, they all agree that in this particular case the transaction between the initial Dutch and Italian suppliers and K constitutes an intra-Community supply within the meaning of the Sixth Directive and that, consequently, where EMAG is concerned, there can no longer be any question of an intra-Community supply.

18However, the parties express differing views on the general answer to the questions referred for a preliminary ruling. Whereas EMAG and the United Kingdom Government consider that in chain transactions it is always the first supply that constitutes the tax-exempt intra-Community supply, in the view of the Austrian and Italian Governments and the Commission it is the circumstances of each individual case that determine which of the supplies is to be regarded as the exempt intra-Community supply.

V — Legal analysis

A — Preliminary remarks concerning the arrangements for the taxation of trade betweenMember States

19Within national territory, the supply of goods is subject to value added tax (Article 2(1) of the Sixth Directive). On the other hand, in the case of goods supplied from third countries to customers in the Community, it is not the supply but the importation into the Community which constitutes the relevant chargeable event (Article 2(2) and Article 7 of the Sixth Directive).

20In the case of cross-border intra-Community trade, under the Transitional arrangements for the taxation of trade between Member States (Title XVIa), Directive 91/680 introduced a further chargeable event, namely, intra-Community acquisition. A brief review of the history of these arrangements, which are still in force, will help to clarify the situation.

21Before the introduction of intra-Community acquisition, cross-border supplies of goods within the Community were taxed in the same way as other international trade. Under the general rules, a supply was taxable at the place of supply within the meaning of Article 8(1)(a) of the Sixth Directive, that is, at the place of dispatch, but was exempted from tax at exportation. Thus, value added tax fell due on importation into the country of destination. Border controls had to be imposed in order to collect VAT on imports.

22The completion of the internal market required that this form of taxation and hence the fiscal controls at internal borders be abolished. 5 However, the reforms did not go so far as to extend the rules applicable to domestic supplies to the trade between two Member States, since that would have meant that value added tax would no longer be levied by the State of importation but by the State from which the goods were dispatched. Thus, in trade within a Member State the supply generally constitutes the chargeable event (Article 2(1) of the Sixth Directive) and the place of the taxable activity is the place where the goods are at the time when transport to the person to whom they are supplied begins (Article 8(1)(a) of the Sixth Directive).

23Under the transitional arrangements, the previous division of authority to tax between Member States was to remain unaffected. As a consumer tax, value added tax was still to be payable in the Member State of final consumption. To that end, Directive 91/680 introduced intra-Community acquisition as a new chargeable event for trade between Member States (Article 28a(1)(a)). Thus, in this case, tax is levied on the receipt of the goods by the person acquiring them in the importing Member State. This chargeable event replaced the former taxation at importation.

24To avoid double taxation — as Advocate General Ruiz-Jarabo Colomer has already explained in Lipjes — tax-raising powers must be coordinated in such a way that, in any intra-Community transaction, where the authority of one Member State ends the authority of the other begins. 6

25Since, in accordance with the transitional arrangements in force, the intraCommunity acquisition is taxed in the country of destination of the goods, the corresponding intra-Community supply in the country of origin must be exempted from tax (Article 28c(A)(a) of the Sixth Directive). Thus, just as intra-Community acquisition has replaced taxation at importation, exemption of the intra-Community supply has replaced exemption at exportation.

B — Secondquestionreferredforapreliminary ruling

26The first two questions referred to the Court are closely intertwined. However, the second question is the more fundamental and should therefore be answered first. Its implications will only be fully appreciated if it is borne in mind how the Austrian tax office appears to treat the stages of a chain transaction.

27It treats both components of the chain transaction as exempted intra-Community supplies. The transaction between the Dutch or Italian undertaking and K in Austria is regarded as the first tax-exempt intra-Community supply and the transaction between the Austrian K GmbH and the Austrian EMAG as the second. However, these two — from a legal standpoint — independent supplies result in a single movement of goods from the Netherlands/Italy to Austria. In order to be able to treat the transaction between the companies K and EMAG, both of which are established in Austria, as a tax-exempt intra-Community — i.e. crossborder — supply, the tax office ascribes the transport of goods from the Netherlands/Italy, which was actually effected by K, to the second supply also.

28Against this background, by means of its second question the Verwaltungsgerichtshof seeks to learn whether a chain transaction does in fact involve two exempted intraCommunity supplies, even though there has been only one movement of goods.

29The tax office's picture of the chain transaction is inconsistent with the objectives of the special arrangements for the taxation of intra-Community supplies in Title XVIa of the Sixth Directive. These arrangements are intended to coordinate the powers of the Member States to tax intraCommunity supplies. Cross-border supplies are to be taxed only once, namely — by way of derogation from the arrangements for domestic transactions — in the country of destination.

30This objective can only be achieved if just one of the supplies in the chain, namely, that which has led to an intra-Community acquisition, is treated as a tax-exempt intraCommunity supply. All earlier and later transactions must then be treated as domestic supplies which, under the general rules, are subject to tax in the State in which they are effected.

31In cross-border transactions, the intra-Community supply exempted from tax under Article 28c(A)(a) of the Sixth Directive is the mirror image of the taxable intra-Community acquisition. If there has been only one movement of goods across the border of a Member State, then there can only be one tax-exempt supply and one taxable acquisition. This ensures that the coordination of the powers of the Member States involved, the goal of the arrangements set out in Title XVIa of the Sixth Directive, functions smoothly and that intra-Community supplies are neither taxed twice nor escape taxation completely (neutrality of taxation). Therefore, in situations such as the present one, in which several persons are involved and could be regarded as acquirers, in order to delimit the authority to tax of the Member States, the cross-border movement of goods must in each case be ascribed to a single supply or acquisition, as the case may be.

32The anomalies that would ensue if, in a case such as that which forms the subjectmatter of the present dispute, two tax-exempt intra-Community supplies were assumed to be present are apparent from the following considerations. There would then be an exempted intra-Community supply from the initial Dutch/Italian supplier to K. This would correspond to a taxable intra-Community acquisition by K in Austria. Under Article 28b(A)(a), the place of this transaction would be the place where the goods were at the time when dispatch or transport to the person acquiring them ended.

33Then, for the supply by K to EMAG also to be treated as a tax-exempt intra-Community supply, the place of this supply would necessarily again have to be in a Member State other than Austria, in which case the only possibilities would be the Netherlands or Italy. Therefore, in this supply chain, K would again supply the same goods from the Netherlands or Italy to Austria, even though it had already acquired them in an intraCommunity acquisition within the meaning of the Sixth Directive.

34Finally, the second intra-Community supply thus construed would be accompanied by a further intra-Community acquisition by EMAG in Austria taxable under Article 28a(1)(a) of the Sixth Directive. Thus, the fictitious duplication of the movement of goods is not only artificial but also leads to double taxation, inasmuch as the same goods trigger two taxable intra-Community acquisitions in Austria.

35Accordingly, the reply to the second question referred for a preliminary ruling should be that only one of the successive supplies is to be treated as an exempted intra-Community supply when several undertakings enter into arrangements for the supply of the same goods and those arrangements are implemented by way of a single movement of goods; in this case the intra-Community supply is that supply which corresponds to an intra-Community acquisition within the meaning of Article 28a(1)(a) of the Sixth Directive.

C — Firstquestionreferredforapreliminary ruling

36The first question referred to the Court concerns the determination of the place of the two supplies under Article 8(1)(a) of the Sixth Directive. In the light of the facts of the initial dispute, the question should be interpreted narrowly as relating only to a chain transaction affecting two Member States.

37The tax office argues that in each case the place of supply should be considered as being the place of actual dispatch in the Netherlands or Italy. In its view, this means that both supplies are exempted intra-Community supplies, a result which is said to follow from an interpretation of Article 8 of the Sixth Directive.

38However, as already established in the reply to the second question, in the case of a cross-border movement of goods of the present kind there is only one exempted intra-Community supply. Where the first question is concerned, it follows that the place where transport begins within the meaning of Article 8(1)(a) of the Sixth Directive is not relevant to the assessment of both supplies when several undertakings enter into arrangements for the supply of the same goods and those arrangements are implemented by way of a single cross-border movement of goods.

39Admittedly, the text of Article 8(1)(a) does allow the Netherlands or Italy to be regarded as the place of supply for both the contractual relationship between the Dutch or Italian supplier and K and that between K and EMAG since when transport began the goods were indeed situated in those Member States. However, this position cannot be reconciled with the arrangements for intraCommunity acquisition in Title XVIa of the Sixth Directive.

40Thus, the determination of the exempted intra-Community supply does not depend on which place was the actual point of departure for the movement of goods and hence constituted the place of supply within the meaning of Article 8(1)(a) of the Sixth Directive. What matters is which supply triggered an intra-Community acquisition within the meaning of Article 28a(1)(a). That supply is the exempted intra-Community supply.

41On the other hand, supplies forming part of the chain which precede or follow intraCommunity acquisition are domestic supplies in the State of dispatch or the State of destination, whose place of supply is to be determined in accordance with Article 8 of the Sixth Directive.

42Thus, in its judgment in Lipjes 7 the Court pointed out that intra-Community acquisition constitutes the relevant transaction in intra-Community trade. The place of this transaction is governed by Article 28b(A) and (B), which derogates in this respect from the general provisions of Article 8 regulating the supply of goods within a Member State.

43Accordingly, the reply to the first question referred to the Court should be that the place where dispatch begins within the meaning of Article 8(1)(a) of the Sixth Directive does not determine whether, within the context of a chain transaction of the present kind, a supply is to be regarded as an exempted intra-Community supply.

D — Third question referred for a preliminaryruling

44The third question needs to be answered only if the answer to the first question is in the affirmative. In the process of answering the first question it was shown that Article 8 (1)(a) of the Sixth Directive cannot be interpreted as meaning that successive supplies in a cross-border chain transaction can be characterised as intra-Community supplies solely on the basis of the actual place of supply within the meaning of that provision.

45However, this does not mean that the answer to the third question is of no relevance to the main proceedings. Thus Article 8 remains generally applicable to domestic supplies that precede or follow the intra-Community supply.

46There is nothing special about the application of Article 8 to supplies that took place before intra-Community acquisition in the State of dispatch alone.

47However, the position is quite different in the case of a domestic supply that follows intra-Community acquisition. If the goods are supplied by the acquirer in the intraCommunity acquisition (in this case K) to a third party in the same Member State (in this case EMAG), then, by way of derogation from Article 8(1)(a) of the Sixth Directive, the place of supply cannot be assumed to be the place where the goods actually were when dispatch or transport began (in this case the Netherlands or Italy).

48Instead, consideration should be given to the question of whether there has already been an intra-Community acquisition in the country of destination of the goods (in this case Austria). Then the country of destination must also be regarded as the place of the supply that follows this acquisition.

49There are two ways of arriving at this conclusion. Firstly, one might regard the domestic supply following acquisition as a case of Article 8(1)(b) of the Sixth Directive (so-called immobile supply). This seems reasonable since the cross-border movement has already been ascribed to the preceding intra-Community supply and cannot now be ascribed to a further supply.

50Secondly, Article 8(2) of the Sixth Directive could be applied by analogy. This provision concerns a special arrangement for determining the place of supply when goods are dispatched to the Community from a third country on the instructions of the importer. Then the place of supply is not the actual place of dispatch in the third country but the Member State of import of the goods. Since, in practice, intra-Community acquisition has taken the place of importation, this would also appear to be a tenable position.

51Since, ultimately, both approaches lead to the place of supply being situated in the Member State in which the preceding intraCommunity acquisition was effected, there is no need to decide which approach should be given preference.

52Accordingly, the answer to the third question referred to the Court should be that within the context of a chain transaction of the present kind the place from which the goods are actually dispatched is not to be regarded as the place of a supply that follows an intra-Community acquisition. On the contrary, the place of supply is situated in the Member State of intra-Community acquisition.

E — Fourthquestionreferredforapreliminary ruling

53By its fourth question, which does not depend on any particular answer to Questions 1 to 3, the Verwaltungsgerichtshof seeks to learn whether the identity of the party having the right of disposal of the goods during their movement is a relevant factor in answering these questions.

54As already explained, in a chain transaction of the present kind the supply that leads directly to an intra-Community acquisition is to be regarded as the exempted intraCommunity supply.

55According to Article 28a(3) of the Sixth Directive, intra-Community acquisition means acquisition of the right to dispose as owner of movable tangible property dispatched or transported to the person acquiring the goods by or on behalf of the vendor or the person acquiring the goods to a Member State other than that from which the goods are dispatched or transported.

56Since in this case a factual element is involved, namely, the acquisition of the right of disposal, a formalised solution is ruled out. Thus, neither the first nor the last supply relationship can always be decisive. Instead it is the circumstances of the individual case that need to be taken into account.

57The ‘transfer of the right to dispose of tangible property as owner’ is also the essence of the definition of supply in Article 5(1) of the Sixth Directive. In this connection, in Shipping and Forwarding Enterprise Safe, the Court of Justice has already ruled that the definition does not refer to the transfer of ownership within the meaning of national law. 8 On the contrary, it covers any transfer of property that empowers the acquirer actually to dispose of it as if he were the owner. These observations also apply, mutatis mutandis, to the definition of intra-Community acquisition.

58A typical expression of ownership is the right to dispose of property as one sees fit, especially to exercise physical control over it and to sell it.

59The relevant factor in an intra-Community acquisition, apart from transfer of ownership, is the passage of the goods across the border. It therefore seems reasonable to assign special importance to their carriage or the arrangement for it. In principle, the person who arranges for the carriage of the goods decides when they will be in a particular place. Where he makes use of a third-party carrier, physical control is ultimately imputable to the principal. Control over the whereabouts of the goods is an expression of the rights of ownership, as constitutive of intra-Community acquisition.

60Consequently, in the absence of other indications, 9 intra-Community acquisition is effected by the person who arranges for the carriage of the goods and hence directly or indirectly exercises power of disposal over them during the cross-border movement. A further requirement is that the person arranging carriage should not be established in the State from which the goods are dispatched or should be not be trading under a VAT number allocated by that State.

61Linking acquisition with responsibility for transport also seems appropriate inasmuch as the person on whose instructions the goods are transported and who has power of disposal over them during carriage is, of all the participants in the supply chain, the one best informed about the places of departure and destination. Within the context of the cross-border supply, this operator has special responsibility for the correct tax treatment of the cross-border transaction.

62Exceptionally, however, the test of arranging for the carriage cannot be applied if the goods are transported by the first supplier in the chain himself (in this case K's initial supplier in the Netherlands or Italy) or on his behalf. Clearly, the supplier/seller cannot at the same time be the acquirer. In arranging for carriage the first supplier does not acquire any (new) rights of ownership but is merely exercising his pre-existing rights.

63In this case Community acquisition can be effected only by one of the subsequent customers. To ensure effective taxation it is then appropriate to regard the direct customer of the first supplier as the tax debtor of the intra-Community acquisition, even if the goods were not actually conveyed to him but to the final customer in the supply chain.

64In fact, only the first supplier — because he has arranged for the carriage — knows that this is an exempted intra-Community supply. Accordingly, he advises his customer (in this case K) that he is not invoicing any value added tax, as a result of which this first customer necessarily incurs the obligation to pay tax on an intra-Community acquisition. On the other hand, in all subsequent supplies value added tax can be shown as a matter of course and taken into account for purposes of input tax deduction.

65The fact that the proposed solution is consistent with the system of Title XVIa of the Sixth Directive is demonstrated by a comparison with the special arrangements in Article 28c(E)(3) of the Sixth Directive for so-called triangular operations. A triangular operation is ultimately a special form of chain transaction in which, however, undertakings from at least three Member States form the supply chain.

66Briefly, these special arrangements mean that an intermediary which as such effects the taxable acquisition in the country of destination because it has arranged for carriage can be exempted from tax liability if it is not established in that country of destination and the end customer established there has been designated as the person liable for tax.10 These special arrangements confirm my position on (simple) chain transactions, namely, that intra-Community acquisition is normally effected by whoever arranges for the carriage of the goods.

VI — Conclusion

67In conclusion, I propose that the questions referred to the Court by the Verwaltungsgerichtshof be answered as follows:

(1) When several undertakings enter into arrangements for the supply of the same goods and those arrangements are implemented by way of a single movement of goods, only one of the successive supplies is to be treated as an exempted intraCommunity supply; in this case the intra-Community supply is that supply which corresponds to intra-Community acquisition within the meaning of Article 28a(1)(a) of the Sixth Directive.

(2) The place where dispatch begins within the meaning of Article 8(1)(a) of the Sixth Directive does not determine whether, within the context of such a chain transaction, a supply is to be treated as an exempted intra-Community supply.

(3) In a situation such as that which forms the subject of the main proceedings, the place from which the goods are actually dispatched is not to be treated as the place of a supply that follows upon an intra-Community acquisition. On the contrary, the place of supply is situated in the Member State of intraCommunity acquisition.

(4) In determining who in such chain transactions effects the intra-Community acquisition, in the absence of other indications, it is of decisive importance to establish who transported the goods or on whose behalf they were transported and who possessed the right of disposal of the goods during transport.

Notes

(197) 7 on the harmonisation of the laws of the

(1) Original language: German.

(2) OJ 1977 L 145, p. 1.

(3) OJ 1991 L 376, p. 1.

(4) BGBl. I No 106/1999.

(5) Cf. the second recital of Directive 91/680.

(6) Opinion of Advocate General Ruiz-Jarabo Colomer of 13 January 2004 in Case C-68/03 StaatssecretarisvanFinanciënv D.Lipjes [2004] ECR I-5879, paragraph 35.

(7) Judgment in Case C-68/03 Lipjes [2004] ECR I-5879, paragraph 25.

(8) Judgment in Case C-320/88 Shipping and Forwarding Enterprise Safe [1990] ECR I-285, paragraphs 7 and 8. See also the judgment in Case C-185/01 Auto Lease Holland [2003] ECR I-1317, paragraph 32.

(9) Conceivably, the contracting parties might designate a party other than that which arranged for the carriage as the person liable to tax. Thus, K and EMAG might have agreed that EMAG should be the person liable to the tax due on the intraCommunity acquisition in Austria. Such agreements are expressly mentioned, for example, in Article 28c(E)(3), fifth indent, of the Sixth Directive, as amended by Council Directive 92/111/EEC of 14 December 1992 (OJ 1992 L 384, p. 47), within the context of so-called triangular operations. (For further details concerning triangular operations see point

(65) et seq. below.)

(10) This obviates practical difficulties with tax collection, since as a rule the non-resident will not be registered for value added tax in the country of destination.