The Tax Department issued in January the newsletter 17A which is referring to one of the quick fixes that meant to be part of the Cyprus VAT Act the latest by 1/1/2020 but so far it has not been passed by the cypriot Parliament.
The four quick fixes aim at simplifying intra-Community trade in goods and cover:
i. “Call-off stocks”
ii. Uniform rules for chain transactions
iii. The existence of a VAT registration number for applying the VAT zero rate
iv. Proof of intra-Community supplies
Subject matter of the newsletter 17A
The newsletter subject matter are safety stocks, also known as Call-Off Stocks, which are transferred or dispatched from another Member State (MS) to be made available to a designated buyer /customer in order to be supplied to that buyer/customer at a later stage depending on his needs. The supplier remains the owner of the goods until the safety stocks are requested by the buyer/customer.
Normal procedure followed when own goods are shipped from one MS to another
The supplier transfers or dispatches goods to another MS and declares the shipment of the goods as intra-Community supply in the MS of dispatch or transfer and as intra-Community acquisition in the MS of the arrival of goods. This means that the supplier, in addition to registering for VAT and VIES purposes in the MS of dispatch, must also register in the MS of arrival in order to declare the arrival of the goods on his VAT return. Subsequent supply of the goods is subject to domestic VAT rules.
Simplified procedure based on the newsletter as from 1/1/2020
The purpose of the simplified procedure with effect from 1/1/20 is to prevent the supplier from registering in the MS of arrival of the goods shipped as call off stocks (also referred to as ‘safety stocks’). In order to implement the simplified procedure, specific requirements must be met by setting specific obligations to both the supplier and the buyer / customer:
With regard to the supplier
With regard to the buyer / customer
For more information and to download the full tax alert click here
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