Cross-border supplies: change in VAT rules as of 2020

19 September 2019 - As of January 2020, all EU member states will introduce a number of new VAT rules aimed at improving the European VAT system for cross-border supplies in the short term. These new rules are also important for internationally operating entrepreneurs in the transport & logistics sector. This applies in particular to entrepreneurs who act as tax representatives for foreign entrepreneurs and in doing so report on cross-border supplies.

Tax representatives

Tax representatives are partly liable for VAT that the foreign entrepreneur must pay to the Tax and Customs Administration. It may be costly for a tax representative if an incorrect VAT payment is made in respect of cross-border supplies made by their customers. It is therefore advisable to properly prepare for the amendment of the VAT rules.

Main VAT changes from 2020 onwards: Quick fixes’

As of January 2020, four short-term measures will be introduced, mainly aimed at entrepreneurs who act as tax representatives for foreign entrepreneurs and in doing so report on cross-border deliveries:

  • For the application of the VAT zero rate in the case of intra-community supplies of goods (B2B), it will be mandatory to have the customer's VAT identification number. According to case law, this number is not a material condition, but that is about to change. In the absence of a correct VAT identification number, the basic assumption is that 21% VAT is applicable.
  • Simplification and harmonisation of the rules on call-off stock: stocks held by companies in a member state other than the member state of establishment in order to be able to sell quickly on demand to already known customers. Several countries have a simplification scheme in place for this purpose that requires compulsory VAT registration in the country where the stock is held; other countries do not have such a scheme in place. From January 2020, it will no longer be necessary, under certain conditions, to have a VAT registration for such transfers in the member state where the stock is held. However, a record must be kept of the transfers and the VAT identification number of the customers concerned must be submitted periodically.
  • Clarification of the rules for entrepreneurs to prove that goods have been transported from one member state to another, which is a prerequisite for applying the VAT zero rate.
  • Simplification of the rules for ABC transactions. It will be easier to determine which transaction in a chain or ABC transaction concerns cross-border supply.

What can Mazars do to help you?

Mazars' VAT specialists can help you implement these ‘quick fixes’ in your daily activities. In addition, Mazars offers a ‘VAT number check’ that can be used to check the validity and accuracy of a large number of VAT numbers.

Want to know more?

Would you like to know more about the impact of these ‘quick fixes’? If so, please contact Raimo Kool by e-mail or by phone: +31 (0)88 277 15 05. He will be happy to help you.

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