In a preliminary ruling, the CJEU ruled that the provisions of the Directive on the common system of value added tax preclude the authorities of a Member State from considering that the place of supply of a service is in the Member State of the supplier, even if there is evidence of fraudulent intent to change the place of supply. The only competent State for VAT purposes remains the one where the recipient of the service is established.
The Austrian courts have referred a request for a preliminary ruling on the VAT Directive to the CJEU in a dispute concerning the transfer of green certificates from an Austrian company to a German company. The transfer allegedly aimed at a fraudulent benefit from a VAT perspective for the recipient company in Germany.
The CJEU (in case C-641/21) noted firstly that the transfer of green certificates qualifies for VAT purposes as a supply of services (see case C-453/15) and secondly that the fraud rules governing the VAT exemption scheme for supplies of goods are not applicable when the place of supply of services is to be determined. That place cannot be altered in breach of the express provisions of the VAT Directive, even if the transaction in question is affected by fraud.