New harmonised rules for exempt intra-Community supplies

At the start of this year, some changes have been introduced regarding proof of intra-Community transactions (quick fixes). At the end of 2019, the implementing provisions in Belgium were published (three Royal Decrees dated 11 December 2019). What should you bear in mind in the future regarding proof of intra-Community supplies?

When certain conditions are met, the intra-Community supply of goods from Belgium to another Member State is normally exempt from VAT (based on Article 39bis of the Belgian VAT Code).

In the past, a VAT exemption for intra-Community supplies was only possible if the invoices were addressed to a correct foreign VAT number and if the supplier could also demonstrate that the goods had left Belgium following the sale. 

As far as proof of dispatch was concerned, under the previous rules, the seller always had to be in the possession of all documentation substantiating the dispatch or transport of the goods. By this we mean order forms, transport documents, payment documents, etc. At the same time, it was already possible to use a destination document, which was useful for ‘collect transactions’ in particular.

At EU level, it was found that the different Member States used widely varying practices. The EU therefore decided to set out a common approach (Implementing Regulation No 282/2011 of 4 December 2018). The Belgian implementing provisions followed on 11 December 2019.

In order to be able to enjoy VAT exemption for intra-Community transactions, the acquirer must now disclose his VAT number from the Member State of arrival of the goods to the supplier. At the same time, the supply must be correctly indicated in the intra-Community declaration. 

Proof of transport to another Member State is still required in all cases. This has now been harmonised at EU level. The new rules vary depending on whether the vendor or the buyer organizes the transport.

If the vendor takes responsibility for the transport, proof can be provided in two ways:

• either on the basis of two items of non-contradictory evidence issued by two different parties that are independent of each another, of the vendor and of the acquirer. For example, this may be a signed CMR document, a bill of lading, an invoice from the carrier, etc
• or on the basis of a single item of non-contradictory evidence of the transport, accompanied by a single item of non-contradictory evidence relating directly to the transport. Examples of this include an insurance policy with regard to the transport or bank documents referring to the payment for the transport of the goods. 

If the buyer takes responsibility for the transport of the goods, the above-mentioned documents must be accompanied by a destination document. This must state that the goods have been dispatched or transported by the acquirer, or by a third party on behalf of the acquirer. It must also identify the Member State of the destination of the goods. 

Based on the Belgian implementing provisions introduced at the end of 2019, the destination document can also be used where the vendor takes responsibility for the transport. 

Unlike in the past, the destination document may now also be signed off by a warehouse manager when the goods are not transported or dispatched to an establishment of the buyer. 

Are you involved in intra-Community supplies on a regular basis? If so, we recommend you take care of the new administrative formalities and ensure that the exemption is sufficiently supported. This way you’ll be ready for a possible VAT audit in thefuture.

More information? 

Should you have any further questions in this respect or if you would like to be provided with more detailed information, please contact Wim De Pelsmaeker, VAT Partner, or your personal account manager.
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