Revisiting the EU VAT “2020 Quick Fixes”

Jeff Gambold
October 30, 2019

Part 1: VAT Identification of the Customer

We recently wrote about the EU’s latest report on the “VAT Gap” – the overall difference between the expected VAT revenue and the amount collected by each Member State. It is hoped that the VAT Gap will be substantially reduced by the introduction of a new definitive VAT regime, which is meant to simplify VAT compliance for business within the Single Market and minimise VAT fraud. The updated rules continue to build on the key foundation of the “destination principle” – that both goods and services should be taxable to VAT in the jurisdiction in which they are used or consumed. The first stage of this process is a series of measures adopted into EU legislation in December 2018 that have been collated into what has been colloquially referred to as the “2020 Quick Fixes” due to be implemented from 1 January 2020. The European Commission’s VAT Expert Group recently published Explanatory Notes providing substantial detail as to how these measures will apply.

This is the first in a series of four blogs providing explanatory detail to the EU’s “2020 Quick Fixes”. Here, we will discuss the updated guidance around VAT Identification of the Customer from 1 January 2020.  

VAT Identification of the Customer

At present, EU VAT registered businesses can move goods from one EU Member State to another VAT free provided they are able to demonstrate the goods have been physically removed from the country of departure and delivered to another Member State. 

Quick Fix: Going forward, it will be compulsory for the VAT registration number of the buyer to be identified and referenced in the transaction for that transaction to be treated as VAT free; the VAT registration number must be of another Member State to the dispatch country (but not necessarily the destination country). For the seller, in practical terms, this will mean:

  • Inclusion of the buyer’s VAT registration number on the seller’s invoice; this effectively means that all affected businesses will need to obtain buyer VAT numbers in advance of fixing their price and generating an invoice.
  • Cross-referencing and reconciliation of invoices with periodic EC Sales Lists or combined Intra-Community Transactions Declarations, depending on the country.
  • A list of all VAT numbers will need to be maintained by the business in its accounting system or ERP, with regular checks against the EU’s VAT Information Exchange System (‘VIES’) database.
  • If the customer is unable to provide their VAT registration number by the time the supplier must issue their invoice, the zero-rating cannot apply. However, the buyer can request a corrected invoice once the VAT registration number is later provided.

For clarity, where Member States issue more than one VAT identification number to a business, with each serving different purposes (e.g. for certain domestic transactions; VAT groups), only that which has attached a two-character ISO prefix (e.g. Germany = DE), and which is searchable via VIES, will meet the requirement.

Some EU countries have already unilaterally introduced some or all the “2020 Quick Fixes” in their local VAT legislations. However, the EU formalises these measures across the board from 1 January 2020. Businesses are encouraged to analyse the new framework to see how they can in turn make improvements and efficiencies in their Intra-Community goods movement processes. 

Take Action

To find out more about what we believe the future holds, download Trends: e-invoicing compliance and follow us on LinkedIn and Twitter to keep up-to-date with regulatory news and other updates.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.


Jeff Gambold

Jeff Gambold is a Senior Regulatory Specialist at Sovos, with responsibility for ensuring that the SVR product is kept updated and compliant with the latest VAT legislative changes. Prior to joining Sovos, Jeff worked in various VAT advisory and management roles within HMRC, UK Top 15 accounting practices and commercial business.
Share This Post

Tax Compliance United States
November 14, 2019
The Top 5 Most Common Unclaimed Property Compliance Mistakes

Full compliance when it comes to unclaimed property requirements can be difficult to determine. For many businesses, it isn’t until they are audited and fined that they find out they made a mistake. Below are the most common mistakes businesses make when complying with unclaimed property requirements. 1. Reporting is mandatory Reporting unclaimed property is […]

EMEA Tax Compliance VAT & Fiscal Reporting
November 13, 2019
Revisiting the EU VAT “2020 Quick Fixes”

Part 3:  Chain Transactions This is the third in a series of four blogs providing explanatory detail to the EU’s “2020 Quick Fixes” that aim to standardise certain VAT rules throughout the EU. Part one of this series focussed on VAT Identification of the Customer, whilst part two provided guidance on the Exemptions of Intra-Community […]

E-Invoicing Compliance EMEA
November 12, 2019
Will the myDATA Project be Delayed in Greece and Mandatory E-Invoicing be Introduced?

Two months after closing the public consultation on the myDATA scheme, the Greek tax authority, IAPR, has yet to share the feedback received from the industry on the proposed scheme or make any official announcement in this regard. However, local discussions indicate that, the IAPR may reintroduce its initial agenda proposed back in August 2018, […]

Tax Information Reporting United States
November 7, 2019
IRS Tax Gap Data Previews the Future of 10-series Reporting Requirements

A recent fact sheet released by the IRS shows the latest tax gap estimates and overall taxpayer compliance and demonstrates why the IRS is likely to strengthen its tax reporting enforcement policies. The findings are based on data from tax years 2011, 2012 and 2013. The purpose of this document is to let the public […]

Sales & Use Tax United States
November 7, 2019
Improving Sales Tax Automation in Manufacturing

Managing manufacturing sales tax is complex for a number of reasons. You may have thousands of SKUs with taxability rules that differ across states, as well as hundreds, if not thousands, of exemption certificates to track and keep up to date for your customers. Additionally, tracking your own inventory for materials used internally that are […]