With effect from 1.1.2020, the amendment to the Value Added Tax Act transposed the relevant European Union directive and its provisions known as “quick fixes”. One of the areas is the newly defined substantive conditions for exempting the delivery of goods to another EU Member State. Substantive conditions are to be understood as conditions without which the exemption cannot be granted.

From 1.1.2020, a new provision will apply to the application of the VAT exemption for the supply of goods to another Member State, according to which the existence of a VAT identification number of the acquirer of goods allocated in another EU Member State becomes a substantive condition for such exemption. In addition, the acquirer must demonstrably disclose its VAT identification number to its supplier. If, at the time of such supply, the acquirer does not have such a VAT identification number allocated in another EU Member State, or the acquirer fails to notify his supplier of that VAT identification number, the supplier cannot exempt such supplies to another Member State from VAT. Additional assignment of the VAT identification number to the acquirer; notification of an invalid acquirer's VAT identification number will no longer allow the supplier to exempt that supply of goods to another Member State from VAT.

At the same time, another, no less significant condition has been added, according to which the exemption is not applied, if the supplier of the goods has not indicated that supply in his recapitulative statement (EC-Sales list) or has provided incorrect data on the supply of goods in the recapitulative statement submitted. Failure to submit a recapitulative statement may therefore be another reason for not granting of the  VAT exemption when goods are delivered to another Member State.

Therefore, we advise suppliers of goods every time they deliver goods to another Member State to verify consistently that:

- the acquirer communicated his VAT identification number before the goods were delivered,

- the acquirer's VAT identification number is valid,

- the supplier himself has issued an invoice with the correct value of the goods delivered,

- the supplier himself has submitted a recapitulative statement indicating the correct VAT identification number of the supplier and the correct amount in euro, and

- the supplier himself keeps records of the goods delivered to another Member State in the VAT records which the supplier is obliged to keep.

The changes introduced by the amendment to the VAT Act have a considerable impact, inter alia, on the internal processes of goods suppliers. Therefore, please do not hesitate to contact our qualified tax experts to assist you with your questions. For more information, visit our website, facebook page or Linked-In profile.