For a tax-free intra-Community supply, the entrepreneur generally has to prove that the goods have actually been dispatched to another EU Member State. However, there are still no uniform rules on proof of delivery within the EU. As a result, all Member States were able to design or even omit the requirements for proof of receipt themselves. Due to these different legal and management situations between States, companies operating internationally face high administrative costs and great legal uncertainties.
For this reason, it was announced by Council of the European Union for Economic and Financial Affairs (ECOFIN) in the course “4 Quick fixes” that from 2020 the same test requirements will apply to all Member States for shipments of goods in EU countries. In order to apply the exemption regulation to the intra-Community supply of goods, two non-contradictory pieces of evidence from different and independent parties must be available. Depending on whether the responsibility for transport lies with the supplier or the consignee, the following documents may be presented as evidence.
Responsibility for the transport of goods rests with the supplier
- Refutable presumption in case the goods are transported/sent by the Supplier directly or at the expense of the Supplier by a third party.
- The supplier has at least two supporting documents from persons independent of him and the buyer (e.g. signed CMR consignment note, bill of lading, air freight invoice, invoice from the carrier of the goods).
- The vendor has one of the documents mentioned above and another document.
- insurance policy for the transport/shipment of the goods.
- bank documents proving payment for the dispatch/transport of the goods
- public documents such as a notary confirming arrival in the country of destination.
- the receipt from the depositary of the Member State of destination.
Responsibility for the transport of goods lies with the consignee
- In addition to the two supporting documents, the Supplier needs a written declaration from the consignee that the delivery item has been transported or dispatched by him or a third party at his expense. This request must be made no later than the 10th day of the month following delivery. The declaration shall contain the following information:
- Date of issue.
- The name and address of the purchaser.
- The quantity and nature of the goods.
- The date and place of arrival of the items.
- Member State of destination.
- In the case of vehicles, the vehicle identification number.
- Identification of the person receiving the goods on behalf of the buyer.
Whereas the other three Quick Fixes Uniform rules to simplify chain transactions, Mandatory VAT identification number to apply the zero VAT rate and Simplified treatment for call-off stock must be transposed into international law, the verification of cross-border transport of goods however will apply directly in all Member States with effect from January 1st 2020.
However, it is unclear whether or not the evidence can continue to be used under national rules. The quick fixes are only the first step in the VAT reform The European Union is aiming for a completely uniform reform for the years 2022 to 2024. Since this subject has not been formulated very clearly and is quite complicated, especially at the beginning, this requires some knowledge in the tax area. If you have any questions, please do not hesitate to contact us.