January 2020 four reforms to improve efficiency of B2B EU VAT regime
Since 1 January 2020, the EU introduced four changes to EU B2B compliance system to help harmonise the rules and make cross-border trade easier. These were part of the 2016 VAT Action Plan, and are being introduced ahead of the wider Definitive VAT System reform proposed for 2020.
Follow all the European Union’s completed and planned reforms via VAT Calc’s EU VAT reform tracker. The four Quick Fix changes are as follows.
- Define the documentation member states may demand of traders seeking to claim zero-rating intra-community supply of goods. Traders responsible for the good’s transport must retain two pieces of non-contradictory evidence that the goods were transported to in the customer’s member state. Or if the customer is responsible, The supplier must obtain written evidence of the transport from the customer, supported with two pieces of evidence. This can be the signed CMR; or insurance policy, official documentary proof of transport etc.
- Harmonisation for the rules of call-off stock supplies and non-resident suppliers of goods avoiding the need to VAT register when they place goods on use or return under their customer’s control in another EU state. Only when the customer takes the goods out of the stock, the supplier is deemed to perform a direct intra-Community supply of goods to the customer.
- New rules in respect to allocation of the transport in chain transactions. According to these rules, the intra-Community transport is to be allocated to the supply made to the intermediary, who arranges the transport. There is an exception to this general rule in case the intermediary communicates to its supplier its VAT identification number granted by the EU Member State from which the goods are dispatched or transported. In that situation, the transport of the goods would be allocated to the supply made by the intermediary to its customer.
- VAT identification number of the customer constitutes an additional substantive condition for the application of the exemption in respect of an intra-Community supply of goods. Respective exemption is applicable only if the customer has provided its VAT number from another EU Member State and the supplier has reported it in its EC Sales list.