From January 1, 2020, new rules on intra-Community supplies of goods will come into effect for VAT purposes. These are "quick fixes" decided at EU level and thus applicable to all EU Member States.
New basic conditions for intra-community supplies
Proof of transport
Intra-community supplies of goods are exempt from VAT and it is up to the supplier to prove the exemption. Proof of transport of the goods to the other Member State is essential in the application of the exemption.
From 2020, the following rules apply: if the supplier is responsible for transporting the goods, he must have two non-contradictory supporting documents from two independent parties. If the buyer transports the goods, a declaration from the buyer plus two pieces of evidence will be required.
The following supporting documents can prove the intra-Community transport of goods: a signed CMR document, an invoice from the carrier of the goods, an insurance contract for the shipment or transport of the goods, a bank statement of payment for the transport, destination document...
In addition, the supply must also be made to a VAT taxable person. From now on, the intra-Community exemption explicitly requires that the buyer communicate his valid VAT number of the Member State of arrival of the goods to his supplier. The formal condition of having the customer's VAT identification number thus becomes a material condition when applying the exemption. The fact that the supplier does not have the valid VAT identification number of its customer means that the exemption cannot be applied! So always check the VAT number of the customer thoroughly via VIES.
Importance of IC Listing
In addition, a new article will be added to the VAT Directive stating that the exemption is also conditional on the submission of an intra-Community listing that contains the legally required information about the supplies. Thus, if the Belgian VAT Administration determines that the taxpayer has not filed an IC listing or has failed to include the correct information in the listing, it may retroactively revoke the exemption. Taxpayers are therefore advised to fill in their intra-Community declarations as accurately as possible.
In the case of (intra-Community) chain sales - for example, triangular sales - successive sales take place between different sellers and buyers whereby, however, the goods are transported directly from the first seller to the last buyer in the series. There are thus several invoices, but only one transport transaction. For VAT reporting purposes, the transport of the goods can only be allocated to one of the transactions. The other sales in the chain are then supplies without transport and therefore constitute a 'national' supply. Only the supply with transport may qualify as an exempt intra-community supply.
In principle, not much changes here. After all, the new European rules are a confirmation of what we already apply today. The main rule is that if the transport is performed by or on behalf of A, the transport is always attributed to the delivery A-B. If C takes care of the transport, then the transport is attributed to the delivery B-C.
However, if the transport is carried out by or on behalf of B, one must determine on the basis of the contracts and terms of delivery to which relationship the transport should be attributed (either A-B or B-C). If this is not conclusive, then the transport is attributed to the relation A-B when B attributes a VAT number of LS B or LS C to A. If B does not communicate a VAT number to A or a VAT number of LS A, then the transport is attributed to the relation B-C.
Selling on demand
Sales on call (or call-off-stock) occur when a VAT taxable person transfers part of the stock of his goods to another EU Member State on behalf of another VAT taxable person. However, the ownership of the goods is not transferred immediately, but only at the time when the customer removes the goods from the stock. Thus, at the time of transfer, the identity of the buyer is already known.
Many EU member states already had a simplification for the VAT consequences in the case of a call-off stock. As of January 1, 2020, a simplification that applies in the same way in all member states will come into effect. As a result of this simplification, the supplier no longer needs to identify himself for VAT purposes in the Member State where the stock is located. And one can thus make a direct intra-Community supply to the final customer. Important conditions here are that:
- The customer/end customer is already known at the time of transfer;
- The supplier and the buyer must record the transfer in a register;
- Withdrawal from the stockpile must occur within one year of the transfer.
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