Intra-Community Supplies of Goods: How B2B Sales in the EU Are Exempt from VAT

What Is an Intra-Community Supply?

An intra-Community supply is the sale of goods by a Greek business to a business established in another European Union Member State, where the goods are actually dispatched or transported from Greece to that Member State. The rationale of the system is that VAT is not paid in the country of dispatch but is taxed in the buyer’s country as an intra-Community acquisition there.

The Four Conditions for VAT Exemption

For an invoice to be issued without VAT, all the following conditions must be met:

• The seller must be a taxable person registered in the VIES system
• The buyer must be a taxable person (or certain non-taxable legal persons, subject to conditions) registered in VIES in its country
• The goods must actually be transported from Greece to the other Member State
• The transaction must be adequately documented, both as regards the buyer’s status and the actual transport of the goods

If even one of these conditions is missing, the exemption does not apply and the Greek business must charge normal Greek VAT on the sale.

The Role of VIES Verification

Before every VAT-free sale, the seller must verify the validity of the buyer’s VAT number through the VIES system and retain a copy of that confirmation showing the verification date. This is not a mere formality: if it is later established that the buyer’s VAT number was not valid at the time of the transaction, the exemption may be challenged and VAT imposed retrospectively on the Greek seller.

Transport Documentation: What You Need to Keep

In addition to VIES verification, the seller must hold evidence that the goods were actually transported outside Greece. Depending on the mode of transport, this may include:

• Transport documents, such as a CMR consignment note, or insurance relating to the shipment
• Bank documents proving payment for the transport
• Official documents from a public authority confirming the arrival of the goods in the destination country
• A written statement from the buyer when the buyer arranges transport using its own means, including recipient details, quantity of goods, and the date and place of arrival

Missing documentation is one of the most frequent grounds for challenge in a tax audit, even when the transaction was in fact entirely lawful.

The VIES Recapitulative Statement

Businesses making intra-Community supplies must submit a VIES recapitulative statement for those transactions, aggregated by period and buyer, within the prescribed deadline. Correct completion of this statement is an additional condition for the exemption—even where all other requirements are met, errors or omissions in the recapitulative statement may put the exemption at risk.

An Example: Sale of Equipment to a German Business

Suppose a Greek IKE sells equipment worth €15,000 to a business established in Germany. Before issuing the invoice, the Greek business verifies through VIES that the buyer’s German VAT number is valid and retains a copy of that confirmation. The goods are transported by a freight company, which issues a CMR consignment note proving delivery in Germany.

With all four conditions met, the Greek business issues the €15,000 invoice without VAT, bearing the statement ‘Exemption under Article 28 of the VAT Code’, and records the transaction in the VIES recapitulative statement for the relevant period. If, by contrast, the business had not retained the transport document, it would struggle during an audit to prove the actual movement of the goods, risking retrospective imposition of VAT at 24% on the value, namely €3,600.

The Most Common Mistakes

1. Issuing an invoice without VAT before verifying the buyer in VIES
2. Missing or inadequate documentation of the actual transport of the goods outside Greece
3. Incorrect or late submission of the VIES recapitulative statement
4. Confusing a sale to a business, which is an intra-Community supply, with a sale to a private consumer in another Member State, where entirely different rules apply
5. Failing to update the documentation when the method of transport or the party responsible changes, whether the seller, buyer or a third-party carrier

For e-commerce sales and the different VAT OSS regime, see our guide to the tax obligations of an e-shop.