Based on draft EU Directives and information available as at 1 September 2018, we understand that a number of short-term improvements to the current VAT system (“quick fixes”) should be introduced as from the year 2020, i.e. :
- simplification and harmonisation of rules regarding call-off stock arrangements whereby the consignor would be relieved to register for VAT purpose in the EU Member State where goods are stored in a call-off stock ;
- simplification of rules regarding chain transactions A-B-C where the intra-Community shipment of goods is made by B ;
- harmonisation and simplification of rules on the proof of the intra-Community transport of the goods in order to exempt from VAT an intra-Community supply of goods;
- the VAT identification number of the customer will be regarded as a substantive condition for the supplier to apply the VAT exemption in case of intra-Community supplies of goods.
Initially, these quick fixes were to be implemented as from 2019 and would have been available only to ‘certified taxable persons’ (‘CTP’), hence excluding businesses based outside the EU which are not eligible for the status of certified taxable person. We understand that his condition would now be removed so all taxable persons should be entitled to use the quick fixes, including businesses based outside the EU, but not before 2020.
The abovementioned measures should enable businesses to simplify their VAT reporting obligations in the case of call-off stock held in a Member State where they are not established, or if they act as buyer-dealer in intra-Community chains sales.
We can help you to assess the steps to be taken with a view to both secure and optimize the VAT treatment of your transactions further to the new rules. Feel free to call us !