增值税法框架与供应地认定

VAT taxes final consumption, not turnover. Every sale creates two numbers:

• Output VAT — charged by the supplier to the tax administration;
• Input VAT — deducted by the buyer from the tax administration.

Because every link in the chain adds the VAT of the previous link to its price, the tax is

multiplied along the chain and finally borne by the consumer. That is tax neutrality.

The classic mistake in the exam is not the rate but the interpretation: neutrality is not the

same as exemption. An exempt supply breaks the chain because the supplier can no longer

deduct its input VAT. That is why the EU uses taxed (a zero rate with deduction) rather

than exempt for ordinary goods.

Two consequences follow:

• For the State, one transaction produces one net payment (output − input); the other links

merely collect and pass on.

• For the business, VAT is neutral only where deduction is allowed. Non-deductible input

VAT (staff meals, private consumption) is a genuine business cost — chapters 4 and 5.

Exam warning: in the EU vocabulary exempt means "not taxed and no deduction", while

"not subject" means the transaction falls outside the tax altogether. Both are often

translated into Chinese as "免税" — do not confuse them.

The geographical scope of the VAT (Articles 6-8 of the VAT Directive) is built on one rule:

the territory of the Member States forms the VAT territory.

Excluded from it:

• German Heligoland and Büsingen am Hochrhein;
• Mount Athos in Greece;
• the Canary Islands — Spain applies IGIC, not IVA, so the islands sit outside the EU

VAT territory;

• the French overseas departments (Guadeloupe, Martinique, Réunion, Mayotte), which levy

their own local taxes rather than IVA.

Special treatment (third territories): Italian Campione d'Italia and Livigno are

treated as third territories; northern Cyprus is de facto outside EU law.

Three territories must be kept apart — the exam mixes them constantly:

They usually coincide but their exceptions differ. Working rule: ask first whether the

goods enter the customs territory, then whether the consumption happens in the VAT

territory, then whether the excise border is crossed.

Exam warning: in any question about the French overseas departments, Monaco, Gibraltar,

Ceuta or Melilla, establish first whether IVA or a local tax applies.

VAT is a two-layer system: EU rules plus national choices. This determines how the papers

are set.

EU level (fixed, Directive 2006/112/EC)

• the definition of a supply and of a taxable person;
• the territoriality principle and the place-of-supply rules (Art. 31, 41-52, 43-48);
• the general taxable-amount rule (Art. 90), invoicing (Art. 226), the conditions for

deduction (Art. 168-169);

• the OSS and IOSS schemes (Art. 305 ff., Art. 369a ff.);
• simplification and administrative cooperation (Art. 28-30).

National level (choices, with EU floors)

• the rates (the standard rate must be at least 15%);
• the list of goods and services qualifying for reduced rates;
• the small-business exemption threshold (EU base €10 000, Member States may raise it to a

maximum of €35 000);

• national simplifications and special procedures (DE §9 UStG, NL Art. 19a, FR Art. 283-2

CGI, and equivalents);

• return periods and deadlines, interest and penalty mechanics, local invoice wording.

How to attack a question: if it asks where, which step, who deducts or when, the

answer is in the EU rules. If it asks which rate, which deadline, how much penalty or

what the invoice must say, the answer is national.

Exam warning: many questions are half EU, half national. Decompose the question before you

answer it.

Step 1: do the goods move inside the EU?

No (they enter from a third country) → import supply, Art. 41: the place of supply is the

moment the goods enter the customs territory of the Union; import VAT is charged at

import (chapter 12).

Yes → step 2.

Step 2: is the customer a B2B customer in another Member State?

Yes → intra-EU supply, dispatch/arrival model: the VAT of the Member State of arrival

becomes due when the goods arrive, the customer reverse-charges it, and the supplier charges

and deducts in the Member State of dispatch (chapter 9).

No (B2C) → step 3.

Step 3: is it a distance sale?

• Goods sent from one Member State to a consumer in another: the rate of the Member State

of destination applies (Art. 33 and 48); below €150 the exemption threshold applies,

above it the destination rate is due (chapter 11).

• Goods sent from outside the EU straight to an EU consumer: import VAT plus the

destination VAT, handled through IOSS (chapters 11-12).

Step 4: is there a fixed establishment involved?

If the supply is made through a fixed establishment inside the EU (a Dutch warehouse sending

to a German customer), that fixed establishment's Member State taxes it. This is the classic

trap in multi-establishment cases (chapter 2).

One-line memory: intra-EU B2B → arrival; intra-EU B2C → destination rate; import →

the moment of entry into the customs territory.

Exam warning: the customs territory and the VAT territory have different exceptions (Morocco,

San Marino and similar territories are outside the VAT territory although inside the customs

territory).

Services do not move, so the rules are built around **whether the service is supplied in the

customer's country** (Art. 43-48).

B2B general rule (Art. 44(1)): the place of supply is where the customer is established.

B2B status is assessed from: registration as a taxable person, holding a local VAT number,

or holding a business address. Any one of them is enough to presume B2B. Where it cannot be

established, the supplier bears the burden of proof, and the supply is treated as B2C.

Exceptions to the B2B general rule (Art. 44(2)-(5)):

• services relating to a building → where the building is situated;
• transport of passengers or goods → each place where the transport occurs (apportioned);
• short-term events → where the event takes place;
• services relating to goods or movable property (repair, processing) → where the goods are

located;

• cultural, artistic, scientific and educational services → where the event takes place.

B2C general rule (Art. 45): where the customer is established; for a private consumer,

where he is located. Exceptions: public transport, passenger transport and certain leisure

services are located where the supplier actually performs the activity; telecom and

electronic services follow the consumer's location.

Non-EU supplier without an establishment in the EU (Art. 48(3)): the place of supply is

the place of receipt of the services — a useful fall-back.

Fixed establishment first: where the supplier has a fixed establishment in the customer's

Member State and that establishment has the human and technical resources to make the

supply, that Member State taxes it, even if the supplier is registered elsewhere.

Exam warning: service place-of-supply turns on the customer's status and the **type of

service** only — not on where the contract was signed, where the invoice was issued or where

the payment was made. All three are classic traps.

• Exempt ≠ not subject: exempt breaks the chain, not subject means no tax exists,

zero-rated still allows deduction. The wording differs in all six languages.

• Intra-EU B2C still carries VAT — at the destination rate. Only distance sales up to

€150 benefit from the threshold. What was abolished on 1 July 2026 is the customs duty

exemption, not the VAT threshold. This is the single most frequent confusion.

• Customs territory ≠ VAT territory: the Canaries, Réunion, San Marino and friends.
• Import VAT is paid at import, not at retail; it is deductible, but it cannot be

marked up on the shelf price.

• The place of supply of a service ignores the contract address.
• A fixed establishment outranks the place of establishment for service taxation.

Every later chapter comes back to this list.

Be able to write these six lines from memory:

• the decision trees (four steps for goods, three for services);
• the list of VAT-territory exclusions;
• import = entry into the EU customs territory;
• intra-EU B2B = arrival; B2C = destination rate;
• when the seller arranges transport, the transfer of risk and the VAT event separate

(chapter 9);

• what was abolished on 1 July 2026 is the €150 customs duty exemption, replaced by a

temporary €3 duty per item type (chapter 17).

What the examiner will ask: a concrete transaction and the four questions — which country,

which rate, how much, who deducts, what the invoice says. Always write the rule reference

first, then the numbers.