In its judgment of 8 May 2026, the District Court Gelderland addressed a recurring question in Dutch VAT practice: when may a taxable person deduct input VAT charged on an invoice, and when may the zero rate be applied to a subsequent intra-Community supply, where the chain of transactions shows clear hallmarks of fraud? The case concerned a Dutch trading company that claimed substantial VAT refunds on invoices from a supplier later identified as a missing trader, while reporting onward sales to a French customer with serious fraud indicators.

The judgment applies, in a single case, both pillars of the Supreme Court's evidentiary framework for invoice-based deduction: the rebuttable presumption that the invoicee is the actual recipient of the supply, and the separate, equally strict requirement that physical transport to another Member State be demonstrated before the zero rate can apply. It also illustrates how courts deal with a taxpayer who, after losing its tax adviser, is left to substantiate large claims with little more than photographs, unverifiable WhatsApp negotiations, and storage invoices that do not match the disputed goods.

Facts and Background

The claimant, a Dutch B.V. incorporated in 2018, traded in surplus and residual stock lots (“restpartijgoederen”). In the second and third quarters of 2020, it claimed to have purchased goods from a Dutch supplier ([naam bedrijf 1]) and resold them to a French customer ([naam bedrijf 2]), reporting the onward supplies under the zero rate as intra-Community transactions.

The claimant requested a VAT refund of €47,045 for the second quarter of 2020 and €87,795 for the third, based primarily on input VAT charged by the supplier in four invoices for the second quarter (€51,536.52) and six for the third (€77,254.79). The supplier had charged Dutch VAT but never declared the corresponding output VAT, filing only nil returns. The Tax Authorities later identified it as a missing trader, deregistered at the end of 2020.

A third-party investigation revealed that the person formally registered as the supplier's shareholder had no actual involvement; the actual shareholder lived in France and, when contacted, confirmed he was the shareholder, stated the company had no activities, and explained the intention had been for it to operate as a construction contractor. He denied having supplied goods to the claimant. The purchases and onward sales, exceeding half a million euros, were said to have been settled in cash, with no receipts or bank records, and negotiations were said to have occurred over unretained Facebook and WhatsApp messages.

The French customer fared no better. French tax authorities established that it had filed no VAT returns since 2019, declared no intra-Community acquisitions, used a registered address that was a mere virtual office unsuitable for unloading trucks, and that the licence plates on the CMR consignment notes did not correspond to any vehicle in the French registration system. Its director was a nominee, and criminal proceedings had been initiated.

The claimant also relied on storage invoices for pallet storage and loading/unloading services, asserting that goods purchased from the supplier had been stored pending collection by the French customer. A site investigation found that the warehouse had not been rented by the claimant or the supplier during the relevant period, and that the pallet quantities invoiced (33 pallets) did not correspond to the quantities allegedly delivered by the supplier (10 pallets).

Based on these findings, the Inspector refused any refund for the second quarter and granted only a partial refund for the third, disallowing the VAT charged by the supplier. The claimant objected and, after the objections were dismissed, appealed to the District Court.

The Dispute

Before the District Court, two questions were central: first, whether the claimant was entitled to deduct the input VAT charged on the supplier's invoices, and second, whether the claimant had correctly applied the zero rate to its reported supplies to the French customer.

The Inspector argued that the claimant had failed to comply with its record-keeping obligations, that the existence of the goods had not been demonstrated, and that the claimant had not shown it obtained power of disposal over them. In the Inspector's view, the chain amounted to sham transactions designed to generate a refund, and claiming a deduction on invoices from a known non-genuine entity amounted to VAT fraud. Alternatively, the substantive conditions for the zero rate were not met, and, further alternatively, the claimant and its director should have known they were participating in a chain in which other parties failed to meet their VAT obligations.

The claimant maintained that no sham transactions were involved, that the input VAT was deductible, and that intra-Community transport had been sufficiently demonstrated by CMR consignment notes despite certain shortcomings. It argued it neither knew nor could have known of any fraud and had acted with due diligence, invoking the principle of due care and the prohibition of abuse of power, alongside a claim for reimbursement of its actual legal costs.

Legal Framework

The right to deduct input VAT under Article 15(1)(a) Wet OB (implementing Article 168 of the VAT Directive 2006/112/EC) requires that the taxable person be the actual recipient of a supply, evidenced by a correctly issued invoice within the meaning of Article 35 Wet OB. Settled Dutch Supreme Court case law holds that, subject to evidence to the contrary, a person named on an invoice as the recipient, obliged to pay for it, is presumed to be the actual recipient (HR 2 December 2011, ECLI:NL:HR:2011:BU6535; HR 14 April 2017, ECLI:NL:HR:2017:680). The Inspector can rebut this presumption, pointing to circumstances undermining the invoice's evidentiary value, after which the burden of proof reverts to the taxpayer.

The zero rate for intra-Community supplies generally finds its basis in Article 9(2)(b) Wet OB in conjunction with Table II, post a.6 Wet OB, against the background of the VAT Directive and, for evidentiary matters, Implementing Regulation (EU) No 282/2011; the judgment itself does not cite these specific provisions, but they form the general framework within which the substantive condition of actual cross-border transport is assessed. Settled case law establishes that this condition is substantive, not merely formal. In collection cases, where the customer collects the goods itself, Dutch evidentiary practice requires the supplier to substantiate the cross-border movement with reliable collection documentation, given the heightened fraud risk.

Application of the Law by the Court

The District Court first confirmed that, because the claimant had received invoices naming it as the recipient of supplies from the supplier, the evidentiary presumption applied: the claimant was, in principle, presumed to be the actual recipient of the invoiced goods. It then examined whether the Inspector had rebutted that presumption.

The court found that he had. The third-party investigation showed the purchases could not be verified at the level of the supplier itself. Because the alleged payments were made in cash, without receipts or bank transfers, payment could not be established, and it remained unclear with whom precisely the claimant had dealt, since negotiations were said to have occurred over unpreserved Facebook and WhatsApp messages. The supplier's actual shareholder denied having supplied any goods, which the claimant did not sufficiently contest. The photographs submitted did not show the specific invoiced goods, and the emails were mostly exchanges with the French customer, containing no objectively verifiable evidence of delivery; one email even suggested the claimant had acted as an intermediary rather than a genuine purchaser. The court concluded the invoices had lost their normal evidentiary force and the presumption had been rebutted.

With the burden of proof back on the claimant, the court held that it had failed to demonstrate that the supplier had actually delivered goods. The storage invoices did not assist: the warehouse had not been rented by the claimant or the supplier during the relevant period, the pallet quantities did not match those supposedly delivered, and the witness statements and photographs did not clarify whether the stored goods were those invoiced by the supplier. The claimant therefore had no right to deduct the VAT charged on the supplier's invoices.

Significantly, the court added that even if the disputed supplies had taken place, this would not have led to a higher refund, because the zero rate could not in any event apply to the claimant's reported supplies to the French customer; this could be corrected by internal compensation. The court found it not plausible that transport to another Member State had occurred in connection with that supply, and noted the claimant's own statement that the French customer collected the goods itself at the storage location, meaning the supply was already completed in the Netherlands. The collection statements relied upon also did not meet the applicable requirements.

The court rejected the claimant's arguments based on the principle of due care and the prohibition of abuse of power: the conduct of the audit did not affect the substantive correctness of the refund decisions, and allegations regarding the Inspector's motives in connection with COVID-19 support subsidies were a matter for the civil courts. The court did award compensation for the excessive length of the proceedings, apportioning €700 to the Inspector and €1,300 to the State, with a modest cost award.

Practical Implications and Conclusion

This judgment illustrates how Dutch courts apply the Supreme Court's invoice-based evidentiary framework in missing-trader and cross-border fraud cases. It confirms that the presumption that an invoicee is the actual recipient of a supply offers only limited protection: it can be displaced where the Inspector points to concrete and mutually reinforcing indicia that the transaction did not occur as described, such as untraceable cash payments, unverifiable communications, and a denial by the counterparty's own representative.

The case is equally instructive on the zero rate. It confirms, in line with long-standing case law, that the zero rate requires proof of actual cross-border transport connected to the specific supply, and that in collection cases the evidentiary bar is still higher. A taxpayer who allows its customer to collect goods domestically, without a properly substantiated collection statement, risks losing the zero rate even if the goods are later moved abroad by someone else.

For businesses in sectors prone to carousel fraud, such as trade in surplus stock, electronics, or textiles, the judgment underscores the importance of maintaining traceable payment records, retaining correspondence evidencing the negotiation of contracts, and ensuring storage and transport documentation can be unambiguously linked to the specific goods and invoices at issue. The fact that the taxpayer's adviser withdrew before the hearing also illustrates the practical importance of having the evidentiary file complete at an early stage, well before any dispute escalates to litigation.