Changed requirements for intra-Community deliveries from 2020 onwards
- Federal Ministry of Finance (“BMF”): Decree dated October 9, 2020 on the conditions for tax exemption of intra-Community supplies -
On October 9, 2020 the Federal Ministry of Finance (“BMF”) has published the long-awaited letter on the conditions for tax exemption of intra-Community supplies, which have been tightened since 01.01.2020.
- Recapitulative statements (“Zusammenfassende Meldung”)
According to § 4 No. 1 Letter b UStG, the tax exemption of the intra-Community supply is dependent on the entrepreneur fulfilling his legal obligation to submit a recapitulative statement (ZM) according to § 18a UStG and that this is correct and complete with regard to the respective supply. Just as in the case of an intra-Community supply in accordance with § 6a paragraph 1 UStG, the tax exemption for an intra-Community transfer in accordance with § 6a paragraph 2 UStG is also dependent on the fact that the transaction is subject to income tax in the other member state and that the transfer is correctly declared in the ZM in accordance with § 4 no. 1 letter b UStG. If the entrepreneur does not submit the ZM correctly, completely or on time, he does not fulfil the condition for tax exemption. The determination that the conditions are not met can always only be made retrospectively, since the submission of a CRM for an intra-Community supply always takes place later, i.e. by the 25th day after the end of each reporting period in which the intra-Community supply was carried out.
The obligation to correct an incorrect ZM in accordance with § 18a, paragraph 10 UStG remains unaffected by § 4, no. 1, letter b UStG. According to § 18a, paragraph 10 UStG, a faulty ZM must be corrected within one month if the entrepreneur subsequently realises that the ZM submitted by him is incorrect or incomplete. Reference is made to § 18a, paragraph 7, sentence 2 UStG. If the entrepreneur does not correct the incorrect ZM for the reporting period in which the relevant delivery was made, the tax exemption for the relevant delivery must be refused retroactively. A correction of errors in a different CRM than the original one will not lead to a revival of the exemption for the supply in question.
- EU VAT ID number
§ Section 6a (1) sentence 1 no. 4 UStG stipulates that an intra-Community supply only exists if the customer uses a valid VAT identification number issued to him by another member state. On the concept of use, see section 3a.2, paragraph 10, sentences 2 to 10. The subsequent use of a valid VAT ID number by the customer at the time of the delivery has retroactive effect for the purposes of tax exemption. The (foreign) VAT ID does not have to be issued by the Member State in which the transport or dispatch ends. The provision of § 3d sentence 2 UStG must be observed. If a VAT ID number issued by the Member State in which transport or dispatch begins has been used vis-à-vis the entrepreneur, this does not constitute an intra-Community supply. If the tax administration of another Member State only issues a VAT ID number to a tax group, this must be recognised in the case of use by the tax group company vis-à-vis a domestic entrepreneur.
- Proof of tax-free intra-Community deliveries
Sections 17a UStDV (presumption of arrival in the case of intra-Community supplies in transport and dispatch cases), 17b UStDV (proof of arrival in the case of intra-Community supplies in transport and dispatch cases) and 17c UStDV (proof in the case of intra-Community supplies in handling or processing cases) regulate the documents with which the entrepreneur must provide proof. If the conditions of § 17a UStDV are met, it is rebuttably presumed that the object of the supply was transported or dispatched to the rest of the Community. If there is no presumption according to § 17a UStDV, the entrepreneur must prove according to § 17b para. 1 UStDV for intra-Community deliveries by means of documents that he or the customer transported or dispatched the object of the delivery to the rest of the Community territory. This requirement must be clearly and easily verifiable from the documents (so-called proof of evidence). With regard to the other requirements of Section 6a (1) of the VAT Act (e.g. entrepreneurial status of the customer, obligation of the customer to pay tax on the acquisition in the Member State of destination), which must also be proven, the VAT Implementing Regulation does not contain any special rules on the proof of evidence.
Sections 17a to 17d UStDV regulate in detail how the entrepreneur has to provide evidence of the tax exemption of an intra-Community supply. While according to § 17a UStDV it is rebuttably presumed, if the conditions are met, that the goods of the supply have been transported or dispatched to the rest of the Community, the proof of proof is deemed to have been provided if the conditions of § 17b UStDV are met. There is no priority relationship between § 17a UStDV on the one hand and §§ 17b or 17c UStDV on the other. The entrepreneur can provide proof of evidence either in accordance with § 17a UStDV or § 17b UStDV. In the form of a general clause (mandatory provision), § 17b para. 1 UStDV stipulates that within the scope of the UStG, the entrepreneur must prove by means of documents that he or the customer has transported or dispatched the delivery item to the rest of the Community. This must be easily and clearly verifiable from the evidence. The entrepreneur does not necessarily have to provide proof of an intra-Community supply with a confirmation of receipt in accordance with § 17b para. 2 no. 2 UStDV or with the other possibilities of proof listed in § 17b para. 3 UStDV:
o The confirmation of receipt is one possible form of proof of receipt with which the conditions for the tax exemption of an intra-Community supply are clear and easy to verify for the tax authorities.
o The same also applies to the documents listed in § 17b (3) UStDV, with which the entrepreneur can prove the tax exemption of an intra-Community supply instead of the confirmation of receipt.
o The entrepreneur is at liberty to provide evidence of the receipt with all suitable supporting documents and evidence from which the arrival of the delivery item in the rest of the Community territory to the purchaser under VAT law is comprehensible and credible in the overall view.
o If the conditions are met, it is presumed that the goods have been transported or dispatched to the rest of the Community. § Section 17a (1) UStDV contains two variants of facts which lead to different requirements for the proof of evidence:
§ While § 17a (1) No. 1 UStDV regulates the case of transport or dispatch by the entrepreneur or by a third party commissioned by him,
§ Section 17a para. 1 no. 2 UStDV applies to all other cases (e.g. collection by the customer).
o Instead of the requirements of § 17a UStDV, the entrepreneur can also provide proof of evidence in accordance with the regulations set out in § 17b or § 17c UStDV.
o Section 17a (2) UStDV specifies the necessary receipts and refers to the transport receipts specified in Section 17b (3) sentence 1 no. 3 UStDV.
o The presumption of success always requires at least two receipts issued by different parties and which are also independent of the entrepreneur and the customer.
o The tax office may rebut a presumption of liability under paragraph 1. The presumption is rebutted if the tax office establishes (e.g. on the basis of available documents or evidence) that the goods have not, for example, entered the rest of the Community, so that there is no intra-Community supply.
o If the tax office can prove that the documents contain incorrect information or are falsified, the entrepreneur is free to prove that the goods have entered the rest of the Community by means of other documents within the meaning of § 17a (2) UStDV.
* * *
Obviously, the BMF has a very strict view on the recapitulative statements. These must be submitted correctly, completely and in due time. Corrections of errors must also be made in due time and also on an accrual basis. With regard to the use of the VAT ID number, there are no high requirements for the proof of use and retroactive use is also possible. However, it must always be checked whether the customer's VAT ID number is valid at the time of delivery. In view of the further increased requirements for tax exemption of intra-Community supplies, it is strongly recommended that the above-mentioned principles be respected.
Please do not hesitate to contact us in case of any questions.
Björn Christian Gerow