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Update: Changes to the Value Added Tax Act (so-called "VAT Quick Fixes")

1. New requirements for tax exemption for intra-Community supplies

From 1 January 2020, a valid VAT identification number (VAT ID No.) and the recapitulative statement (recapitulative statement) will become a substantive legal requirement for the application of the tax exemption for intra-Community supplies:

- The recipient must be registered for VAT purposes in a Member State other than the Member State of departure.
- The recipient must have communicated the VAT ID to the supplier.
- The supplier must have reported the turnover correctly and in good time in the recapitulative statement via the VIES system.

We therefore recommend a qualified query of the validity of the VAT ID when executing the delivery. It is also important to ensure that the recapitulative statement is submitted correctly and on time.

2. Formal proof for intra-Community deliveries - proof of receipt

A rebuttable presumption provision is introduced to prove that an object has arrived in another Member State. If the proofs regulated in § 17a UStDV are fulfilled, it is rebuttably presumed that the prerequisites for a tax-free intra-Community supply are fulfilled.

The tax authority can refute this presumption with concrete facts. If this is the case, the taxpayer must provide proof of tax exemption. A distinction between carriage and dispatch is no longer made. The decisive factor here is whether the responsibility for transport lies with the supplier or the recipient.

a. Responsibility for the transport of goods lies with the supplier:
Refutable presumption in the event that goods are transported/shipped by a third party directly by the supplier or on his behalf:
- The supplier has at least two supporting documents from persons who are independent of him and the purchaser (for example: signed CMR consignment note, bill of lading, air freight invoice, invoice of the carrier of the goods) or
- The supplier has one of the documents mentioned above and another document:
- insurance policy for the transport/dispatch of the goods, or
- bank documents proving payment for the dispatch/transport of the goods
- public documents such as a notary who confirms arrival in the country of destination, or
- receipt from the warehousekeeper in the Member State of destination

b. Responsibility for the transport of goods lies with the recipient:
In addition to the two supporting documents, the Supplier requires a written declaration from the Recipient that the delivery item has been transported or dispatched by him or by a third party at his expense.
This must be submitted by the 10th day of the month following delivery at the latest. The declaration shall contain the following information:
- Date of issue
- the name and address of the acquirer
- the quantity and nature of the articles
- the date and place of arrival of the objects
- Member State of destination
- for vehicles, the identification number of the vehicle
- identification of the person receiving the goods on behalf of the purchaser

At the same time, by retaining §§ 17a and 17b as §§ 17b and 17c UStDV, it is bindingly stipulated that proof can continue to be furnished in Germany on the basis of the "old" supporting documents.

3. New regulations for series transactions

According to § 3 para. 6a UStG, only one delivery in a series transaction is a tax-exempt intra-Community delivery. However, no express provision has been made for cases in which the first or last entrepreneur is responsible for the transport.

This will be expressly regulated in accordance with § 3 (6a) UStG from 1 January 2020:
- If the transport/shipment is the responsibility of the first supplier in a row (he/she ships the goods himself/herself or on his/her own account by a third party), the tax-exempt transport/shipment can only be attributed to the first delivery.
- In the case of carriage/shipment for the account of the last customer in the series, the exempt carriage/shipment can only be attributed to the last delivery.
- If one of the intermediaries within the series is responsible for the transport, the delivery to him is generally regarded as the moving delivery - unless he informs his supplier of his VAT ID of the state of departure.

4. Simplification rules for consignment stocks

According to § 6b UStG, a direct intra-Community delivery exists if the removal of the goods takes place within 12 months after loading and the following conditions are fulfilled:
- in the case of transport, there is already a contract with the customer that the goods will be delivered to this customer at a later date,
- the supplier is not established in the country of destination,
- the customer has a valid VAT ID number of the target country,
- in the case of transport, the identity of the customer and his VAT number are known and
- the supplier reports the transport in a special register and the VAT ID number of the customer separately in his central message.
It is no longer a prerequisite that the parties involved are certified taxable persons.

* * *

The "Quick Fixes" that have now been adopted require a short-term review of the internal processes, insofar as this has not already been done. This applies in particular with regard to the stricter provisions described under points 1 and 2 for obtaining tax exemption for intra-Community supplies.

Please contact Björn Christian Gerow directly at

b.c.gerow@egsz.de

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