EU 'quick fixes' change VAT on cross-border transactions live from 1 January 2020

07 January 2020

Regardless of Brexit, new harmonised rules across the EU will make many practical changes to the way businesses deal with cross-border transactions.

Who needs to know about the changes?

If your business moves goods between EU Member States, you now need to understand the new VAT rules for cross-border transactions and consider their impact on your supply chains and reporting systems.

Why are the changes happening?

The quick fixes are intended to make the EU VAT system more definitive by harmonising and simplifying some of the uncertain areas surrounding how VAT is treated on cross-border transactions within the EU. By making the legislation clearer and uniform across the EU, the EU is hoping to save businesses significant administrative expense in some areas. Whether this objective will be achieved in practice remains to be seen.

What are the changes?

Harmonised proof of transport of intra-EU supplies of goods

  • Previously, rules on the evidence required to prove a supply was an intra-EU supply (and thus benefitted from being zero-rated) and differed between EU Member States.
  • The quick fix harmonises and simplifies the regulations by introducing new rules that all Member States must comply with.
  • Suppliers must be able to produce two items of non-contradictory evidence, prepared by two different independent parties, to prove that a supply is destined for another EU Member State.
  • If the acquirer is responsible for the transport, the acquirer must also provide the vendor with a written statement that the goods have been transported by the acquirer or on the acquirer’s behalf by the 10th of the month following the date of supply.
  • Acceptable forms of evidence are set out within the regulations but include a signed CMR document (consignment note showing the standard set of transport and liability conditions), a bill of lading or an insurance policy for the transport of the goods.


In Ireland it is already a requirement to obtain satisfactory evidence that the goods have been removed from the jurisdiction. This harmonisation gives a clear definition of what is satisfactory in all EU Member States.

A key point to note is that the two pieces of evidence must now be supplied by two separate parties that are independent of each other, the vendor and the customer.

Where the acquirer collects the goods (e.g. under ex-works incoterms) a written statement must be provided to the vendor.

Zero-rating of intra-EU supplies of goods

As of 1 January 2020, the following additional conditions must now be met in order for an intra-EU supply to be zero-rated:

  • The supplier must obtain the customer’s valid EU VAT registration number, and
  • The transaction must be included on the supplier’s EC Sales List.


In Ireland, it was already a condition of zero-rating an intra-EU dispatch that you must obtain the customer’s EU VAT number and display this on the invoice, so nothing has changed here regarding this. However, the new rules bring in the additional requirement that an intra-EU dispatch cannot be zero-rated if the supply is not included on the supplier’s EC Sales List for the relevant period.

Although still not strictly a condition under EU law as a result of the changes, it is best practice to display the customer’s EU VAT number on the invoice when supplying goods cross-border. This is the best practical evidence that the customer has indicated its VAT number to the supplier at the relevant time.

Call-off stock

  • In the context of cross-border VAT, call-off stock refers to the situation where the supplier knows the identity of the person acquiring the goods at the time the goods are transported to another Member State, but where transfer in title to the goods will change at a later date and after they’ve arrived in the Member State of destination.
  • Previously, the rules on call-off stock arrangements differed between countries, resulting in uncertainty as to whether or not call-off stock gave rise to a deemed supply (a movement of own goods) and a subsequent domestic supply, which would have required the supplier to register for VAT in the recipient country.
  • Under the new rules, EU businesses will no longer be required to register for VAT in the recipient country if operating under call-off stock arrangements. Instead, the recipient will be required to account for the VAT in the Member State of destination.
  • The key conditions are that the supplier must not have a fixed establishment in the Member State of destination and that the customer must be VAT-registered there at the time the transport of the goods begins.


The new rules will provide more certainty when supplying goods cross-border on a call-off basis. As long as the conditions are met, businesses operating in this way will no longer need to register for VAT in the Member State of destination.

Chain transactions

  • A chain transaction is one which involves successive supplies of goods, with only a single intra-EU movement of those goods. Previous rules were unclear in determining which transaction in a chain transaction was the intra-EU supply that could be zero-rated for VAT purposes.
  • Where the goods are transported directly from the first supplier to the last customer in the chain, the transport (and, therefore, the zero-rated supply) shall be ascribed to the supply from the first supplier to the intermediary.
  • However, where the intermediary is registered for VAT in the Member State from which the goods are dispatched, has supplied its VAT number to the first supplier and is responsible for the transport, the intra-EU supply shall be ascribed to the supply by the intermediary to the final customer.


These rules should provide more certainty regarding the VAT treatment of chain transactions, which should be harmonised across the EU.

However, the rules are still open to different interpretation in each EU Member State.

Furthermore, this change could create some issues for companies involved in these more complex supply chains that cross EU borders, particularly as a result of Brexit.

In the event of the UK leaving the EU, it will no longer be possible for UK companies to participate in simplified triangulation.

As a result, UK companies may wish to consider registering in countries where their major suppliers are based to avoid them having to register in all Member States of destination of their goods.

However, it will not be enough to merely register for VAT as the UK company (assuming it is the intermediary in the supply chain) will also need to arrange the transport of the goods to avoid it having to register in the Member State of destination of the goods.

This should be considered carefully in the run-up to Brexit.

Effective date of changes?

The above changes came into effect from 1 January 2020.

What if I don’t comply?

These changes are introduced by all EU member states via a mandatory change to legislation. As a result, not complying with these changes leaves your business open to potential risk. 

For more information contact Ivor Feerick at [email protected] or 01 470 0390