For the exemption of an intra-Community supply, the trader must prove in principle that the goods have actually reached the rest of the Community territory. So far, neither the VAT Directive nor the VAT Regulation contains a so-called proof of receipt. The national legislators can freely design or refrain from the requirements for proof of receipt. The European Court of Justice has repeatedly confirmed this legal position in its decisions. As a result, the inconsistent legal situation, especially in the practice of internationally operating companies, has led to high costs and great legal uncertainty.

New regulation in the VAT-DVO

As part of the Quick Fixes, Article 45a (COUNCIL IMPLEMENTING REGULATION (EU) 2018/1912) will be added to the VAT Regulation with effect from 01.01.2020. This provision contains rules on the so-called documentary proof, with which the taxpayer must document that the goods actually reached the rest of the Community territory. Article 45a of the VAT Regulation has the following structure:

  • Paragraph 1 contains a presumption rule in favor of the entrepreneur seeking tax exemption for intra-Community supplies. Paragraph 1 differentiates with regard to the conditions for the presumption rule according to whether the supplier or the buyer arranges the transport.
  • Paragraph 2 stipulates that the respective tax authority may refute the presumption arising from paragraph 1.
  • Paragraph 3 lists the various evidences that the taxpayer must have in accordance with paragraph 1 in order to benefit from the presumption rule in paragraph 1. Paragraph 3 also distinguishes according to which of the parties (supplier or customer) arranges the transport.

In principle, the presumption rule in paragraph 1 applies if the trader has at least two of the documents referred to in paragraph 3 which do not contradict each other in substance.
If the entrepreneur arranges the transport to the customer, he can lead the proof by two different documents to the dispatch or to the transport of the commodity, for example, a signed CMR bill of lading or freight bill. The prerequisite for this is that the two documents were issued by two different third parties who are independent of the entrepreneur and the customer. Alternatively, the entrepreneur may provide proof of one of these documents if he also has one of the following documents:

  • Insurance policy for the transport of goods
  • Bank documents that result in the payment of transport costs
  • Confirmation of the goods receipt in the Member State of destination by a public authority (eg notary)
  • Confirmation of a warehouse keeper about the storage of the delivery items in the Member State of destination.

If, on the other hand, the purchaser initiates the transport of goods (pickup case), the entrepreneur additionally requires a written declaration from the purchaser that this has prompted the transport. The declaration must contain certain information, such as eg arrival date and place of arrival of the goods, but also the identification of the person who receives the goods on account of the purchaser. Thus, this statement has much in common with the currently required in Germany confirmation of arrival.
The standard does not contain a statement on how the tax authority can rebut the presumption of paragraph 1.

In principle, the creation of a uniform Union-wide regulation on the requirements for documentary proof must be considered positive. However, it is not clear today whether the new regulation is exhaustive and leaves no room for additional national regulations and requirements. It is clear from the legal material that the new regulation is also based on the idea of ​​unification. However, it cannot be inferred from the wording of the standard itself that it is a final rule. The German legislator has not yet positioned itself to whether the provisions on proof of evidence in the VAT Implementing Regulation will continue even after 01st  January 2020 and in what proportion the current regulations on the new regulation. If necessary, a short-term adaptation of the company processes will be necessary here once again.
Regardless of this question, it can be stated that the requirements for keeping proof will continue to increase in the future.