As of 1.1.2020 we will have more clarity on the documentation requested when billing VAT-free on intra-Community sales.

The ruling remains the same: You can apply the zero VAT rate when selling the goods to another EU registered company and when the goods are moved to another EU member state.

But from 1.1.2020 the documentation requirement related to proof of transport has been clarified, therefore:

  1. You must ensure that the purchaser VAT No. is correct. If the VAT no. cannot be verified in VIES, you cannot apply the zero VAT rate.
  2. You must prove that the goods have been shipped to / delivered in another EU member state. Documentation must consist of two non-contradictory evidential documents (the evidence must be issued by two independent parties, such as forwarder and bank).
    1. Category A document: Documents related to the transport such as signed CMR, bill of lading, airfreight invoice or an invoice from the carrier.
    2. Category B document: documents such as insurance policy related to the transport, bank receipt related to the payment of the transport, signed receipt from a warehouse manager confirming storage of the goods.

The clarification of the documentation requirements related to the proof of transport is in many ways needed. Now there is consensus on what documentation is requested which is good for both companies and authorities. We will therefore probably see an expansion of the freight forwarder role as the provision of structured shipping documentation to customers will be mandatory in the future.

It is also worth noticing that companies selling their goods EXW (making them available to the buyer in the “courtyard”) must comply with the same documentation requirements in order to apply the zero VAT rate. So if you cannot prove with two separate evidential documents or with a written declaration from the buyer that the goods are delivered in another EU member state, you cannot apply the zero VAT rate.

Are you unsure of the documentation needed or the administration of the data then feel free to contact TIMEVAT.