Revisiting the EU VAT “2020 Quick Fixes”

Jeff Gambold
November 21, 2019

Part 4 – Call-Off Stock Arrangements

This is the last 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, part two provided guidance on the Exemptions of Intra-Community Supplies of Goods and part three, looked at changes around the handling of Chain Transactions which take effect from 1 January 2020.  Here, we discuss the updated guidance around the handling of Call-Off Stock Arrangements which again, are effective from 1 January 2020.  

What is call-off-stock?

The phrase “call-off stock” describes circumstances where a business dispatches goods to a storage location for a customer whose identity and VAT registration number are already known to the supplier at the time the movement takes place, and who is entitled to extract goods from that stock on-demand.  Under the present VAT rules, the physical transfer of the goods to a warehouse in the other Member State results in a theoretical Intra-Community supply of goods by the supplier in the Member State of departure and theoretical Intra-Community acquisition by the customer in the country where the warehouse is located. Any subsequent removal of goods from stock is a domestic supply of the goods in the destination country.  In principle, this would require the supplier to register and account for VAT in the destination country.  Some Member States have simplification measures in place to mitigate VAT cash flow and administrative requirements. 

Quick Fix

Going forward, under specified conditions, physical transfer of the goods between Member States won’t constitute a theoretical Intra-Community supply, and the supplier will never be required to VAT register in the destination country. This is intended to ensure that call-off arrangements are identical in each EU country.  

The specified conditions are:

  • Both parties are Taxable Persons as defined in the EU VAT Directive;
  • The supplier doesn’t have a physical business establishment in the destination country (but can still be VAT registered there; also, there is no requirement that the supplier has a physical establishment in the country of dispatch);
  • The purchaser “calls-off” the goods within a twelve-month period;
  • Both the supplier and customer record the goods movement in a register (although the register can in practice be maintained by a third party);
  • The supplier records the movement in its EC Sales List or equivalent periodic recapitulative statement;
  • The purchaser has a VAT registration in the destination country;
  • The purchaser’s identity and VAT registration number are already known at the time the goods are dispatched;
  • The goods are moved from one EU Member State to another (i.e. the transaction does not involve an in-country movement, or imports or exports between an EU Member State and a non-EU country);
  • Goods that cannot be readily tracked on an individual item basis are identified in the stock system;
  • If an agreement between a supplier and customer ends, a new agreement with that customer or another must start on or before the contract end date for the call-off simplification rules to be maintained.

Normally, if any goods are lost, stolen or destroyed following their arrival into storage in the destination country, the call-off stock arrangement ceases to be fulfilled and the simplification can no longer apply.  Here, the dispatcher would be required to VAT register and account for VAT in the destination country.  However, it’s anticipated the revised rules will include a provision to ensure this doesn’t need to happen if the value of the items lost, stolen or destroyed is below a tolerance threshold.

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

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

August 12, 2020
Can IPT Drive Behavioural Change in the Population?

Unprecedented times. It’s a phrase that’s been used so much of late but the pandemic is certainly not the first incident that has adversely affected society on a global scale. Before coronavirus, there had been a strong focus on environmental issues and initiatives. With an increase in extreme weather incidents over the last decade, governments […]

E-Invoicing Compliance EMEA
August 12, 2020
Portugal: Details on the QR Code and UUID Expected

In February last year, the Portuguese government published the Law Decree 28/2019 rolling out changes affecting e-invoices. The goal of the Law Decree is to simplify and consolidate pieces of law that are scattered around the Portuguese legal framework. However, the effectiveness of many of those rules is still dependent on further regulation, such as […]

August 11, 2020
10 Steps to Expand Your Winery

Looking to enter a new market or bring new wines to the marketplace? Growing any business can be complicated, and the beverage alcohol industry is no exception. Not knowing how or where to begin can be the biggest hurdle. From market research and branding to strategic considerations and compliance, this 10-step guide will get you […]

August 10, 2020
Ask Alex: Your Bev Alc Compliance Questions Answered (August 2020)

Do you have questions about the rules, regulations, and compliance requirements of the beverage alcohol industry? This series, Ask Alex, is a perfect opportunity to get those pressing questions answered straight from one of the industry’s regulation and market experts, Alex Koral, Senior Regulation Counsel, Sovos ShipCompliant.  To take advantage of this opportunity and get […]

Tax Compliance
August 7, 2020
GAO Urges IRS to Overhaul 1099 Reporting for the Gig

A couple of weeks ago, the Government Accountability Office (GAO) released a report to the Senate Finance Committee describing the issues the IRS faces in enforcing income tax compliance for gig economy workers. The report highlighted long-standing issues the government has been grappling with in receiving tax information necessary to enforce compliance along with specific […]