These apply to:
- Call off stock accounting - this is where goods are transferred to a pre-determined customer in another EU member state to create a stock on which the customer can ‘call off’ stock when required. A reportable intra-EU supply takes place when the goods become available to the customer or after 12 months;
- Triangulation/chain transactions - depending on the VAT status of the parties involved and who arranges transportation of goods, one or more intermediaries in the chain may need to register for VAT in the country of destination of the goods and account for local VAT;
- Goods sent for processing or repair in the EU – this is where goods are sent to another EU member state for some action to be undertaken. The goods must be returned within six months or VAT is payable in the EU state they are sent to (and this may require VAT registration);
- Goods supplied and installed in another EU member state – if goods are sent to another EU member state and are installed by the supplier, he can opt to have the VAT registered customer account for the VAT due. This saves the supplier having to register for VAT in the EU member state he installs the goods.
Some accounting requirements are also being updated:
- Proof of intra-EU supplies - seller must hold two non-contradictory items of evidence of transfer of goods eg signed bill of lading, insurance policy, bank documents showing payment etc; and
- VAT number requirement to prove zero rating between businesses (the seller must have the VAT number of the buyer and complete the EC sales list).
These new ‘simplifications’ will apply to any business moving goods throughout the EU and will apply in all EU member states from 1 January 2020. If your business moves goods around the EU now is a good time to review your supply chains, iron out accounting systems and address contractual and commercial issues.
A no deal Brexit will mean the fixes will not apply to UK businesses.