On the 1st of January, 2020 the Directive (EU) 2018/1910 and the Implementing Regulation (EU) 2018/1912 came into force, concerning what are known as the “VAT Quick Fixes 2020”, which involve significant changes to the regulations on intra-community transactions, and they are as follows:
INTRA-COMMUNITY SUPPLIES OF GOODS SHALL ONLY BE EXEMPT OF VAT IF THE CLIENT SUPPLIES THEIR NIF-VAT NUMBER AND THE TRANSACTION IS INCLUDED IN FORM 349
When goods are sent to another country within the EU, this consignment is tax free (invoiced without VAT). Up to now, the goods delivered could be exempt, even if the client did not have a NIF-VAT number, as long as they could prove the transaction through other legally accepted elements of proof.
From now on the NIF-VAT number is required to be able to benefit from the tax exemption. That means to say that if the client does not provide us with their NIF-VAT number we cannot exclude the VAT from the invoice under any circumstances whatsoever.
We would also like to point out that from the 1st of January, 2020, the NIF-VAT number of Dutch companies has changed, so all our Dutch clients have to give us their new NIF-VAT numbers once again.
Furthermore, to be able to benefit from the tax exemption the transaction must be declared in form 349.
CALL OFF-STOCK SYSTEM
A call-off stock arrangement is agreed upon between a supplier, based in a member State, an entrepreneur or professional who has a warehouse located in another member State (consignee), through which the supplier sends the goods to the warehouse of the consignees without transferring the ownership of this merchandise, and subsequently, pursuant to their business requirements, the consignee acquires the consigned goods.
The objective of this agreement is to have a stock of the product at the facilities of the consignee, to therefore be able to speed up the deliveries, and the main characteristic of it is that the supplier knows the identity of the person who will finally acquire the goods ahead of time, even though the sales transaction occurs after the merchandise has been dispatched.
Previously this transaction resulted in what was known as a “transfer” (exemption for intra-community supplies of goods in the member State of origin and the Intra-community acquisition of supplies in the member State of destination), which meant that the acquisition had to be declared in the member State of destination.
With the new regulation coming into force and in compliance with a number of requirements, the client (the consignee) shall now be expected to declare the intra-community acquisition of the supplies, which frees the supplier from the obligation to declare this in the member State of destination. The most important requirement is that the period between when the goods are sent and sold must be less than 12 months.
To this end, a new specific ledger for these transactions shall be created. For the companies that use the SII (Immediate Supply of Information on VAT), the Spanish regulations, which are still pending approval, foresee that these ledgers will be mandatory from 2021 onwards.
The European regulation establish a new rule to link transport in triangular transactions.
Transportation is linked to the transaction where the intermediary operator acts as the buyer; except for when the intermediary operator has a NIF-VAT number of the State from where the goods are dispatched, in which case the transportation is linked to the transaction in which the supplier acts like the seller.
This might give rise to changes in the way that these triangular transactions are registered and notified.
NEW RULES ABOUT THE PROOF OF INTRA-COMMUNITY TRANSPORT
The community regulation establishes that it shall be presumed that intra-community transport has occurred when the seller has two items of non-contradictory evidence relating to transport or one item of non-contradictory evidence and another transport document.
Non-contradictory evidence can be as follows:
- Signed CMR.
- Bill of lading.
- Airfreight invoice.
- Freight carrier’s invoice.
Other pieces of evidence can be:
- Insurance policy.
- Bank documents that prove the transportation payment.
- Documents from the notary.
- Documents that prove the storage of the goods in the warehouse of destination.
If the buyer organises the transportation of the goods, the seller must also be in possession of a statement from the buyer that certifies this.