Revisiting the EU VAT “2020 Quick Fixes”

Jeff Gambold
November 6, 2019

This blog was last updated on November 30, 2021

Part 2: The Exemptions of Intra-Community Supplies of Goods

This is the second in a series of four blogs providing explanatory detail to the EU’s “2020 Quick Fixes”. This article focuses on updated guidance around the Exemption of Intra-Community Supplies of Goods coming into effect on 1 January 2020.  

 The EU Implementing Regulation contains a scheme for supplying the evidence required to treat Intra-Community supplies of goods (i.e. between EU Member States) as VAT free. If the supplier arranges the transport of the goods, or the transport is arranged on their behalf, two independently obtained pieces of evidence from the following list are needed to demonstrate that the goods have genuinely been shipped to another Member State.  These include:

  • Documents that act as proof of dispatch, e.g. a signed CMR/consignment note, bill of lading, airfreight invoice or carrier’s invoice
  • An insurance policy covering the dispatch or transport of the goods, or bank documents that prove the payment
  • Documents issued by a public authority validating arrival of the goods in the destination country
  • A receipt issued by a warehouse keeper in the destination country substantiating their entry into storage.

If instead the customer arranges the transport, the supplier must also obtain a receipt from the customer to confirm that the goods have arrived in the destination country. 

Quick Fix

Going forward, the terms of the Implementing Regulation will become standardised in all Member States, overriding any existing local national legislation. This should improve legal certainty for businesses in determining when they can zero rate their transactions and will facilitate a uniform cross-border business process to all EU goods movements. If for any reason the tax authority challenges the correctness or authenticity of one or more of the items of evidence, the VAT relief will still apply if the supplier is able to produce alternative documentation to meet the requirement (i.e. a minimum of two other independently obtained items of evidence from the above bulleted list). 

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.

Author

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

2025 tax filing season
North America Tax Information Reporting
November 21, 2024
Top 5 FAQs to Prepare for the 2025 Tax Filing Season

This blog was last updated on November 21, 2024 While “spooky season” may be over for most of us, the scariest time of year for many businesses is right around the corner: tax filing season. As they brace themselves for the flood of forms, regulatory updates, and tight deadlines, the fear of missing a critical […]

dtc shipping law updates
North America ShipCompliant
November 13, 2024
DtC Shipping Laws: Key Updates for Alcohol Shippers

This blog was last updated on November 13, 2024 When engaging in direct-to-consumer (DtC) shipping of alcohol, compliance with different state laws is paramount and so keeping up with law changes is critical. In 2024, the rules in several states for DtC have already been adjusted or will change soon. Here is a review of […]

sales tax vs. use taxes
North America Sales & Use Tax
November 8, 2024
Sales Tax vs. Use Tax, Explained. Who Reports What, and When?

This blog was last updated on November 19, 2024 One of the core concepts in sales tax compliance is also one of the most frequently misunderstood: the differences between sales tax and use tax. These tax types may look similar on the surface, but knowing the differences is essential for staying compliant and avoiding costly […]

2025 bond project
North America Tax Information Reporting
November 4, 2024
2025 NAIC Bond Project – The Insurer’s Guide

This blog was last updated on November 14, 2024 The regulatory landscape for insurance companies is undergoing significant changes with the Principles-Based Bond Project which is set to take effect on January 1, 2025. These changes, driven by the National Association of Insurance Commissioners (NAIC), will impact how insurance companies classify and value bond investments, […]

E-Invoicing Compliance EMEA VAT & Fiscal Reporting
November 1, 2024
VAT in the Digital Age Approved in ECOFIN

This blog was last updated on November 7, 2024 The long-awaited VAT in the Digital Age (ViDA) proposal has been approved by Member States’ Economic and Finance Ministers. On 5 November 2024, during the Economic and Financial Affairs Council (ECOFIN) meeting, Member States unanimously agreed on adopting the ViDA package. This decision marks a major […]