Review of 2020 4 Quick Fixes finds room for practical improvements
The European Commission’s VAT Forum has produced a review of the 2020 VAT Quick Fix measures. These were introduced to effect four changes to the rules around B2B intra-community (within EU borders) VAT transactions to help reduce fraud and harmonise the rules between member states.
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Issues identified by the report
In broad terms, the VAT Forum found consistent application of the four Quick Fixes. But it did identify a number of specific problems:
- The Explanatory Notes produced to support the Quick Fixes were limited in scope and therefore resulted in varying interpretations by the member states. Also, it’s important to produce regular updates as business models evolve.
- Member states’ tax authorities had limited sight of how other member states were implementing the fixes.
- Linked to the above, member states were sometimes coming to different interpretations of the rules, thereby resulting in variations.
- Definitions of criteria for warehousing (see call-off stocks) were inconsistent between states
- Variations in the transport definitions, including stop-overs, express couriers for small value goods and own means of transport
- Day-to-day issues with the VIES system and tax authorities’ VAT registration databases.
The four quick fixes were:
- Harmonise VAT rules on call-off stocks to reduce the need for foreign VAT registrations
- Mandatory checks on VAT numbers for the right to zero-rate intra-community supplies (see our VAT Number Checker for service)
- Confirm documentary evidence traders must retain to prove movement of goods across EU borders and qualify for zero-rating
- Introduce new rules on allocating the transport to chain transactions (see our VAT Advisor for tool to help with this)