Intra-Community supply of goods for consideration

A supply of goods for consideration in the territory of the European Union is defined as the delivery or transportation of movable property (a part of assets to be used in a business activity by a Latvian VAT trader) from Latvia to a destination in another EU State for the purposes of provision of its business activity, provided that such transfer is carried out by an inland taxable person or by another person on behalf of the trader (Article 8(1) of the VAT Act.

The following are exemptions from the above rule:

• the supply of goods intended for distance selling (Article 13 of the VAT Act)
• the supply of goods intended for installation or assembly provided that installation or assembly of such goods is carried out by a supplier or by another person on behalf of the supplier
• the supply of goods by the taxable person on board a ship, an aircraft or a train in the course of a passenger transport operation within the territory of the European Union
• the supply of gas to another Member State through the natural gas distribution system which is located in the territory of the European Union or any networks connected to such system, the supply of electricity, thermal energy or cooling energy through thermal energy or cooling networks
•  the supply of the goods referred to in Sections 43, 47, 48 and 50 of the VAT Act to which the 0% VAT rate is applied in the territory of the Member State where the dispatch or transport of such goods ends
• the supply of gold, coins and banknotes to central banks of the Member States
• the dispatch of goods to another Member State for the receipt of treatment, assessment, processing or repair services, if goods after receipt of the abovementioned services are returned to inland
• the dispatch of goods for temporary use within the territory of the destination Member State, which is related to services supplied by a taxable person conducting economic activity inland
• the dispatch of goods for temporary use, for a period not exceeding 24 months, within the territory of the destination Member State, in which the importation of the same goods for the purpose of their temporary use would be covered by the arrangements for temporary importation with full exemption from customs payments.

If one of the conditions fails to comply, the goods are regarded as having been dispatched or transported to another Member State. A transaction is deemed to take place in the territory of the European Union at the time when that condition fails to comply.

The dispatch or transport of goods to another Member State in accordance with Article 45 (1)(2) of the VAT Act after their release for free circulation inland are treated as a supply of goods for consideration in the territory of the European Union.