1) VIES – Compulsory VAT registration number
As from 2020, VIES registration for the purchaser in case of intra-EU supplies (goods transported from one Member State to another) will become even more important than nowadays. It will become a substantive condition instead of a formal one.
That means that not having the VAT number of the purchaser or having an invalid VAT number right registered at VIES would imply that intra-EU supplies of goods would not be VAT exempt in the European Member State of departure of the goods and that the local VAT will be due.
2) Intra-EU supplies of goods: compulsory proofs of transport
Intra-EU supplies of goods (goods transported from one Member State to another Member State) between VAT taxable persons are VAT exempt in the Member State of departure of the goods. The supplier has to be able to prove the transport of the goods. To provide this proof has been a source of difficulties in many European Member States. As from 2020, the seller will have to provide at least two non-contradictory pieces of evidence out of a list defined by the new legislation (e.g., CMR document and payment’s receipt of the transport).
A completely new requirement introduced when the buyer takes care of the transport of the goods (or a person on their behalf). In this case they must provide the seller with a written statement that the goods have been transported to the destination in a European Member State.
It is therefore extremely important that European Member businesses performing intra-EU supplies of goods determine the evidence they will be able to collect and the appropriate procedure to collect and keep it, including the new purchaser statement.
3) Call-off stock
From 1 January 2020, all European Member States will be requested to apply a call-off stock simplification regime into their VAT internal law. Call-off stock is where a supplier in Member State A transfers stock to another in Member State B so that stock can be called-off by a specific identifiable customer established in Member State B when required by this customer. In general, the supplier must register for VAT in Member State B and charge local VAT to its customer. The call-off stock simplification regime relieves, under some conditions, the supplier from having to register for VAT in Member State B and shift the payment of the VAT to the customer.
European-taxable persons that recognize own position in such schemes in its country or abroad should examine whether they meet the conditions of this new regime and could take advantage from it.
4) Chain transactions: contractual arrangements become relevant In the specific case of a chain transaction where the same goods are dispatched or transported from one Member State A to another Member State B directly from the first supplier to the last customer in the chain, the dispatch or transport shall be ascribed only to the supply made to the intermediary operator. So that only the delivery between the first supplier and the intermediary would be considered as the exempt intra-EU supply.
However, if the intermediary provides to the first supplier the VAT number under which he is registered in the Member State A (the State of the first supplier),
- the delivery between the first supplier and the intermediary would be considered as an internal delivery in the Member State A,
- and the delivery between the intermediary and the last customer of the chain would be considered as the exempt intra-EU supply.
European Businesses should therefore verify any contractual arrangements applicable to chain transactions they are involved with, including more complex ones involving several intermediaries and transports.
Moore is able to evaluate and consider any possible impact of these new rules on your business in order to mitigate VAT risks in terms of additional VAT liabilities, registration and reporting obligation.