Skip links

EU Quick Fix VAT reforms

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.

EU VAT reforms

Reform (click for details) Update
2025 VAT registration thresholds equivalence foreign businesses On track
Virtual events VAT rule changes Agreed
2024 Payment providers' seller transaction reporting and bookkeeping obligations On track
Digital Reporting Requirements (DRR), e-invoicing and live transaction reporting Implementation of VAT in the Digital Age?
2023 DAC 7 - marketplace reporting obligations on sellers' activities On track
Financial Services VAT exemption reform proposals Consultation complete; proposal 2023
Tour operator margin scheme VAT reforms EC undertaking fresh review
2022 EU definitive VAT system Member states not agreed on format
EU reduced VAT rate freedoms Enter into force 6 April 2022
IOSS reforms to prevent double taxation Proposals early 2022
VAT in the Digital Age proposals On track for Q3 2022 detailed proposal
Single EU VAT registration - extension of OSS for B2B and B2C On track for Q3 2022 detailed proposal
Proposal for VAT treatment of the platform economy On track for Q3 2022 detailed proposal
VAT Gap Initiative Q3 2022
2021 One-Stop-Shop (OSS) single EU VAT return In effect
Ending €22 import VAT exemption; new IOSS return In effect
Marketplace deemed supplier EU VAT reforms In effect
2020 EU four Quick Fixes for VAT In effect
Tax authorities anti-VAT fraud cooperation In effect
Tax Action Plan - 25 VAT and other tax reforms roadmap See 'VAT in the Digital Age' and others
2019 Simplification of e-services VAT compliance and thresholds In effect
Single and multi-use vouchers In effect
2018 Lower e-book and publications VAT rates In effect, although not all EU states have adopted the option
EU Generalised Domestic Reverse Charge VAT Mechanism In effect, although no country has adopted this voluntary option
2015 B2C electronic services VAT reforms - MOSS return In effect

Leave a comment