Art. 9, 1 Directive 2006/112/EC ‘Taxable person’ shall mean any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity.

Any activity of producers, traders or persons supplying services, including mining and agricultural activities and activities of the professions, shall be regarded as ‘economic activity’. The exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis shall in particular be regarded as an economic activity.

Art. 14, 1 Directive 2006/112/EC ‘Supply of goods’ shall mean the transfer of the right to dispose of tangible property as owner. […]

Art. 24, 1 Directive 2006/112/EC ‘Supply of services’ shall mean any transaction which does not constitute a supply of goods.

Art. 20 Directive 2006/112/EC ‘Intra-Community acquisition of goods’ shall mean 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, in a member state other than that in which dispatch or transport of the goods began.

Art. 30 Directive 2006/112/EC ‘Importation of goods’ shall mean the entry into the Community of goods which are not in free circulation within the meaning of Article 24 of the Treaty.

In addition to the transaction referred to in the first paragraph, the entry into the Community of goods which are in free circulation, coming from a third territory forming part of the customs territory of the Community, shall be regarded as importation of goods.

The place of delivery of the goods may be:

• Place where the goods are made available
• Place of dispatch
• Place of assembly

Supply of goods without transport – Art. 31 Directive 2006/112/EC ‘Where goods are not dispatched or transported, the place of supply shall be deemed to be the place where the goods are located at the time when the supply takes place.

Supply of goods with transport – Art. 32 Directive 2006/112/EC 'Where goods are dispatched or transported by the supplier, or by the customer, or by a third person, the place of supply shall be deemed to be the place where the goods are located at the time when dispatch or transport of the goods to the customer begins.

However, if dispatch or transport of the goods begins in a third territory or third country, both the place of supply by the importer designated or recognised under Article 201 as liable for payment of VAT and the place of any subsequent supply shall be deemed to be within the member state of importation of the goods.

Supply with assembly - Art. 36 Directive 2006/112/EC ' Where goods dispatched or transported by the supplier, by the customer or by a third person are installed or assembled, with or without a trial run, by or on behalf of the supplier, the place of supply shall be deemed to be the place where the goods are installed or assembled.

Where the installation or assembly is carried out in a member state other than that of the supplier, the member state within the territory of which the installation or assembly is carried out shall take the measures necessary to ensure that there is no double taxation in that member state.

CAREFUL: sales of goods with transportation to consumers (distance sales) and sales to exempt taxable persons (e.g. some public entities) have specific place of supply rules. Especially webshops should take these rules into consideration.

General rule: Art. 43 Directive 2006/112/EC 'The place of supply of services shall be deemed to be the place where the supplier has established his business or has a fixed establishment from which the service is supplied, or, in the absence of such a place of business or fixed establishment, the place where he has his permanent address or usually resides.

Particular provisions:

• Supply of services by intermediaries Art. 44 Directive 2006/112/EC 'The place of supply of services by an intermediary acting in the name and on behalf of another person, other than those referred to in Articles 50 and 54 and in Article 56(1), shall be the place where the underlying transaction is supplied in accordance with this Directive. [...]
• Supply of services connected with immovable property Art. 45 Directive 2006/112/EC 'The place of supply of services connected with immovable property, including the services of estate agents and experts, and services for the preparation and coordination of construction work, such as the services of architects and of firms providing on-site supervision, shall be the place where the property is located.
• Supply of transport Art. 46-51 Directive 2006/112/EC
• Supply of cultural and similar services, ancillary transport services or services relating to movable tangible property Art. 52-55 Directive 2006/112/EC 'The place of supply of the following services shall be the place where the services are physically carried out:
  a) cultural, artistic, sporting, scientific, educational, entertainment or similar activities, including the activities of the organisers of such activities and, where appropriate, ancillary services;
  b) ancillary transport activities, such as loading, unloading, handling and similar activities;
  c) valuations of movable tangible property or work on such property.

[...]

Supply of miscellaneous services Art. 56-57 Directive 2006/112/EC

1. The place of supply of the following services to customers established outside the Community, or to taxable persons established in the Community but not in the same country as the supplier, shall be the place where the customer has established his business or has a fixed establishment for which the service is supplied, or, in the absence of such a place, the place where he has his permanent address or usually resides:

a) transfers and assignments of copyrights, patents, licenses, trademarks and similar rights;

b) advertising services;

c) the services of consultants, engineers, consultancy bureaux, lawyers, accountants and other similar services, as well as data processing and the provision of information;

d) obligations to refrain from pursuing or exercising, in whole or in part, a business activity or a right referred to in this paragraph;

e) banking, financial and insurance transactions, including reinsurance, with the exception of the hire of safes;

f) the supply of staff;

g) the hiring out of movable tangible property, with the exception of all means of transport;

h) the provision of access to, and of transport or transmission through, natural gas and electricity distribution systems and the provision of other services directly linked thereto;

i) telecommunications services;

j) radio and television broadcasting services (until 31 December 2006);

k) electronically supplied services, such as those referred to in Annex II (until 31 December 2006);

l) the supply of services by intermediaries, acting in the name and on behalf of other persons, where those intermediaries take part in the supply of the services referred to in this paragraph.

Art. 40 Directive 2006/112/EC 'The place of an intra-Community acquisition of goods shall be deemed to be the place where dispatch or transport of the goods to the person acquiring them ends.'

Art. 60-61 Directive 2006/112/EC

Art. 60 The place of importation of goods shall be the member state within whose territory the goods are located when they enter the Community.

Art. 61 By way of derogation from Article 60, where, on entry into the Community, goods which are not in free circulation are placed under one of the arrangements or situations referred to in Article 156, or under temporary importation arrangements with total exemption from import duty, or under external transit arrangements, the place of importation of such goods shall be the member state within whose territory the goods cease to be covered by those arrangements or situations.

[...]

Art. 72-92 Directive 2006/112/EC

General rule Art. 73 'In respect of the supply of goods or services, other than as referred to in Articles 74 to 77, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.'

Importation

Art. 85 In respect of the importation of goods, the taxable amount shall be the value for customs purposes, determined in accordance with the Community provisions in force.

Art. 86

• 1. The taxable amount shall include the following factors, in so far as they are not already included:

  (a) taxes, duties, levies and other charges due outside the member state of importation, and those due by reason of importation, excluding the VAT to be levied;

  (b) incidental expenses, such as commission, packing, transport and insurance costs, incurred up to the first place of destination within the territory of the member state of importation as well as those resulting from transport to another place of destination within the Community, if that other place is known when the chargeable event occurs.

• 2. For the purposes of point (b) of paragraph 1, ‘first place of destination’ shall mean the place mentioned on the consignment note or on any other document under which the goods are imported into the member state of importation. If no such mention is made, the first place of destination shall be deemed to be the place of the first transfer of cargo in the member state of importation.

Export basically is a seller, transporting goods outside the customs territory of the European Union. If the buyer is established in another country, the exemption for exports can also be applied if this buyer transports the goods to a place outside the EU.

Art. 146, 1 Directive 2006/112/EC 'Member states shall exempt the following transactions:

(a) the supply of goods dispatched or transported to a destination outside the Community by or on behalf of the vendor;

(b) the supply of goods dispatched or transported to a destination outside the Community by or on behalf of a customer not established within their respective territory, with the exception [...]';

An intra-Community delivery is a sale of goods to a taxable person in another member state of goods that will actually be transported to that other member state.

Art. 138 Directive 2006/112/EC

1. Member states shall exempt the supply of goods dispatched or transported to a destination outside their respective territory but within the Community, by or on behalf of the vendor or the person acquiring the goods, for another taxable person, or for a non-taxable legal person acting as such in a member state other than that in which dispatch or transport of the goods began.

An importation, immediately followed by an exempt intra-Community delivery may be exempt from import VAT.

Art. 143 d) Directive 2006/112/EC

Member states shall exempt the following transactions:

[...]

(d) the importation of goods dispatched or transported from a third territory or a third country into a member state other than that in which the dispatch or transport of the goods ends, where the supply of such goods by the importer designated or recognised under Article 201 as liable for payment of VAT is exempt under Article 138;

Other transactions may also be exempt of VAT (TITLE IX Exemptions, Art. 131-166 Directive 2006/112/EC).

Comment → the right of deduction of the VAT on purchases may be conditioned if there is no VAT to be applied on the outgoing invoices.

Art. 193 Directive 2006/112/EC: 'VAT shall be payable by any taxable person carrying out a taxable supply of goods or services, except where it is payable by another person in the cases referred to in Articles 194 to 199 and Article 202.'

Information on the conditions and procedure to apply for a VAT registration in another member state is available at http://ec.europa.eu/taxation_customs/taxation/vat/ traders/vat_community/index_en.htm

Taxable persons providing services to taxable persons established in another EU member state can in principle shift their tax liability to this client. The latter will declare the applicable VAT as due in his periodic VAT declaration and, if applicable, deduct the amount due. This 'reverse charge mechanism' is only possible if the client is VAT registered and files periodic declaration. Member states have extended this reverse charge mechanism to several other transactions by foreign suppliers to domestic customers.

Art. 194 Directive 2006/112/EC

• 1. Where the taxable supply of goods or services is carried out by a taxable person who is not established in the member state in which the VAT is due, member states may provide that the person liable for payment of VAT is the person to whom the goods or services are supplied.
• 2. Member states shall lay down the conditions for implementation of paragraph 1.