In European law governing alcohol sales (the Sixth Council Directive 77/388/EEC(1) supplemented by Directive 91/680/EEC(2)) the distinction is drawn, on the grounds of the means of delivery, between the concepts of (i) distance selling and (ii) teleshopping. Whether VAT on the transaction is paid to the country of origin or the country of destination is determined on the basis of the method of delivery of the goods.
When a consumer orders, from another Member State, alcohol which is dispatched or transported to the consumer in the country of destination by the vendor or on his behalf, then distance selling has occurred. In distance selling, VAT is always levied on the sale of alcohol in the country of destination, irrespective of the country of sale. Where there is a transaction involving delivery to the consumer, the delivery of the alcohol is deemed to take place in the country of destination.
Teleshopping occurs when the consumer himself, rather than the vendor, organises the transport of the goods from the country of origin to the country of destination. In teleshopping, the sale of alcohol is always subject to VAT in the country of origin. The place of delivery of the alcohol is the place where the product begins its journey.
Can a supplier offering consumers alcohol teleshopping services on the Internet publish advertisements on his own website for a third party’s transport services without his activity being regarded as distance selling? This is an important question in ascertaining whether the VAT on the sale is to be charged in the country of origin or of destination.