VAT: Council adopts short-term fixes to current EU system
The Council adopted three short legislative acts aimed at adjusting some of the EU’s VAT rules in order to fix four specific issues pending the introduction of a new VAT system.
These relate to:
- call-off stock. The text provides for a simplified and uniform treatment for call-off stock arrangements, where a vendor transfers stock to a warehouse at the disposal of a known acquirer in another member state;
- the VAT identification number. To benefit from a VAT exemption for the intra-EU supply of goods, the identification number of the customer will become an additional condition;
- chain transactions. To enhance legal certainty in determining the VAT treatment of chain transactions, the texts establish uniform criteria;
- proof of intra-EU supply. A common framework is established for the documentary evidence required to claim a VAT exemption for intra-EU supplies.
These adjustments are due to apply from 1 January 2020.
In parallel, discussions are ongoing on a definitive VAT system to replace the current ‘transitional’ VAT arrangements, applied since 1993. Pending introduction of the new system, four short-term ‘quick fixes’ are proposed.