VAT News:

Teleos Plc Win Backing From Advocate General in Landmark Case

Teleos Plc purchased large quantities of mobile phones in the UK and sold them to their European customers in Spain and France. The stock was delivered to UK freight forwarders for onward transport to Europe and original CMR's were later provided as evidence of export. It was later proved by Customs that the goods were not exported and that the CMR's were false. Teleos argue that they were provided with the CMR's in good faith and that they should still retain the right to zero rate their exports. Teleos lost all appeals in the UK, but has recently appealed to the European Court of justice ("ECJ").

The Advocate Generals' opinion is that Teleos are, in fact, right and that they should still be able to zero rate its exports. This is a landmark decision, which would affectively allow companies to zero rate exports, even if it is later proved that the goods were not exported. A company would simply need to show that they obtained export evidence at the time in good faith. The ECJ decision is due out soon and is expected to agree with the Advocate Generals' decision.

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