The quick fixes package provides guidance on the following topics which were in much need of unified measures across the EU. The aforementioned provisions relate to the following:
- treatment of call off stocks
- chain supplies of goods
- validation of the customers VAT number and VIES declaration submission as a precondition for applying the zero rate.
Treatment of call-off stocks
With regards to the treatment of call-off stocks the Tax Department issued Information Notice 17A in January 2020 in advance to the passing of the legislation. Call-Off Stocks, are goods dispatched from another Member State (MS) to be made available to a specific buyer /customer at a future date according to their needs. The supplier remains the legal owner of the goods until these stocks are “called-off” by the buyer.
Usual procedure relating to call-off stocks
The supplier moves the goods to another MS and declares the shipment of the goods as intra-Community supply in the MS of dispatch and as intra-Community acquisition in the MS of the arrival of goods. This entails that the supplier must also register in the MS of arrival in order to declare the intra-Community acquisition. Subsequent supply of the goods is subject to domestic VAT rules.
Simplified procedure from 1/1/2020
The purpose of the simplified procedure is to enable the transaction to be declared without the need for the supplier to register for VAT in another MS. At the timing of the intracommunity supply becomes the time that the goods are “called-off” by the customer, rather than the time of the movement of the goods by the supplier to the other Member State. The application of the simplified procedure is subject to conditions and obligations pertaining to both the supplier and the buyer including the requirement to declare the goods on VIES at the time of their movement with the VAT registration number of the intended recipient. Notice 17A (Greek) may be found here.
Chain Supply of Goods
The new provisions aim at simplifying/harmonizing the treatment of chain transactions relating to goods. When there are successive supplies of goods but the goods are moved directly by the original supplier to the final customer, the intra-community supply is attributed to the intermediary, unless that intermediary has a VAT registration number in the Member State of the original supplier.
Validation of the customers VAT number and VIES declaration
The application of zero VAT rate for the intra-community supply of goods is subject to the possession of a valid VAT number by the recipient of the goods and the notification of that number to the supplier, as well as the declaration by the supplier of the transaction on EC Sales List (VIES).
It is noted that the measures have retrospective effect from 1/1/2020 which is the date mandated by the aforementioned EU Directive.