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EU: VAT quick fixes; simplified proof for intra-Community supplies

EU: VAT quick fixes; intra-Community supplies

One of four areas under the EU’s value added tax (VAT) “quick fixes” concerns simplified proof for intra-Community supplies.

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Background

The EU Council in December 2018 adopted the “VAT quick fixes” that are intended to simplify international trade and to be implemented by the EU Member States by 1 January 2020.

The VAT quick fixes concern the following four items:

  • Simplified treatment for call-off stock
  • Uniform rules to simplify chain transactions
  • Mandatory VAT identification number to apply the exemption for intra-Community supplies
  • Simplified proof for intra-Community supplies


Harmonizing and simplifying the rules on proof of intra-Community transport of goods

Currently, to apply the VAT exemption for intra-Community supplies of goods, the supplier must prove that the goods have actually been transported from one EU Member State to another. The way in which this proof of transport is required to be documented is not harmonized and differs from EU Member State to EU Member State. The lack of harmonization leads to legal uncertainty for businesses active in the international trade of goods. 

The fourth item—simplified proof for intra-Community supplies—reflects the EU Council’s introduction of a rebuttable presumption of intra-Community transport in instances when the supplier is in the possession of a minimum number of evidential documents. According to the new rules, it will be presumed that the goods have been transported to another EU Member State when the supplier is in the possession of at least two non-contradictory evidential “A-documents” (such as a signed CMR document, a bill of lading, an invoice for the freight transport, etc.) or one “A-document” together with one “B-document” (such as insurance documents relating to the transport of the goods, a receipt from the warehouse operator, an official document issued by a public body, etc.) as issued by two different parties that are independent of each other (the supplier and the acquirer (buyer)).

If the goods have been transported by the buyer—or by a third party on behalf of the buyer—the supplier also needs to be in the possession of a written declaration from the buyer, stating that the goods have been transported by the buyer, or by a third party on behalf of the buyer, and identifying the EU Member State of destination of the goods.

In situations when the supplier is in the possession of sufficient evidential documents, there is a presumption of intra-Community transport.


Rules in Belgium

Current Belgian practices (concerning a set of coherent documents proving the transport, the destination document, etc.) remain in place and can continue to be applied. It is, however, clear that the Belgian VAT authorities may not require more documents to prove the intra-Community transport than under the VAT quick fix measures.

Read a November 2019 report prepared by the KPMG member firm in Belgium

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