German law requires certain strict formal documentation as evidence for the VAT exemption of an export or an intra-Community supply. The German Federal Fiscal Court (BFH) has decided in a recent judgment that the taxpayer must present the formal documentation in most cases in order to get the VAT exemption (BFH vom 19.3.2015 - V R 14/14). According to the BFH, it can be possible to document the cross-border shipment with other suitable documents, but there was no free choice of evidence such as reverting to witnesses, etc. The only rare exceptions to this rule would be granted in cases where: (i) it was not possible for the taxpayer to collect such evidence; or (ii) it was anyway clear beyond any doubt that the goods have been shipped across borders (such as the facts underlying the Court of Justice of the European Union (CJEU) case landmark case of Collée; EuGH v. 27.9.2007 – Rs. C-146/05).
In our view, this judgment overemphasizes the importance of the formal evidence under German law and thus violates the idea that the CJEU had expressed in its judgments in Collée and Teleos (EuGH v. 27.9.2007 – Rs. C-409/04). The taxpayer must be allowed to prove the cross-border shipment with all available means of evidence in order to support the VAT exemption and to achieve VAT neutrality. The formal evidence provides a simplified procedure to show evidence, but it cannot be held against the taxpayer by precluding him from other forms of proof. This issue should be related to the CJEU. This might still be possible if need be, as the judges of the Federal Tax Court appeared to have clearly disagreed on the aforementioned VAT treatment of formal evidence. A lower court judge might feel tempted to relay the case to the CJEU. Apart from that, taxpayers should do their best to comply with the strict requirements on formal evidence under German law.