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Here's an update on VAT for transport services from EU to non-EU countries

In 2017, the European Court of Justice ruled that transports of goods to non-EU countries (export case) had to be treated as zero-rated supplies (not subject to VAT) only in case these supplies are rendered directly to the consignor (usually seller of goods) or the consignee (usually buyer of goods) of the transported goods. German tax authorities adopted this jurisdiction with its decrees on February 6, 2020 and September 27, 2021.

With the above in mind, this will mean that the transport of goods to German customers (contracting party) that start in the EU and end in non-EU countries will therefore be subject to VAT in future if they are not directly provided to the consignor/ consignee of the goods but to a carrier or freight forwarder as middlemen (who is contracted either by the actual consignor/ consignee of the goods or subcontracted by a further carrier/ freight forwarder). In this case, these services must be invoiced with the German VAT.

The German tax authorities had allowed treating these services transitionally as zero-rated until the end of 2021, and Hapag-Lloyd AG made use of this transitional regulation. However, from January 1, 2022, transport services to non-EU countries are subject to VAT if they are rendered to carriers and freight forwarders.

The new VAT rule does not apply to transport services from non-EU countries to the EU (import case). Therefore, we will continue to invoice freight forwarders and carriers for these services without VAT, as long as the conditions for the zero-rating are met. Furthermore, we will continue to invoice zero German VAT if your business is established in a country different to Germany and consumes the services in that country.

How to handle discrepancies?

With the above in mind, there might be instances where invoices might have been issued with a different VAT calculation. Please find below the scenarios that may arise:

  • Invoice with 19% by mistake?
    If you have received an invoice showing German VAT for an export case since January 1, 2022, although you contract services from us always as consignor/ consignee, please inform us via email to [email protected].

  • Invoice without 19% by mistake?
    If you have received an invoice without the German VAT for an export case since January 1, 2022, although you contract services from us never as consignor/ consignee (affects freight forwarders/ carriers), please inform us via email to [email protected]
  • Do you have a correct invoice?
    If you have filed an invoice revision and, find that the invoice was indeed correct, we kindly ask you to withdraw your invoice dispute.

Once you responded to this information, we will review your case again. Should your complaint be justified, we will correct the disputed invoice and update our customer master data record.

We would like to ask you to kindly share this information with your tax department or certified tax advisor.

If you should require additional information, please contact our customer service team at your location, who will guide you based on your individual situation.
 

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