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Germany Urged To Ensure Data Sharing On Call-Off Stock Arrangements

by Ulrika Lomas, Tax-News.com, Brussels

20 February 2020


Germany's IT systems are not ready for the VAT "quick fix" simplifications that entered into force on January 1, 2020, according to the European Commission.

The VAT quick fixes are intended to simplify VAT compliance for businesses and strengthen and harmonize EU rules ahead of the introduction of more comprehensive reforms to EU VAT law scheduled for 2021. The European Commission has sent a letter of formal notice for Germany regarding quick fixes relating to the transportation of goods from one member state to another, known as "call-off stock arrangements."

"Call-off stock arrangements" refer to a situation where, at the time of the transport of goods to another member state, the supplier already knows the identity of the person acquiring the goods, to whom these goods will be supplied at a later stage, and when they will arrive in the member state of destination. The VAT rules have been simplified to avoid a situation where the supplier has to register for VAT in another member state only because of stock held there.

The simplification of the rules means that member states can exchange with each other electronic information to avoid fraud. The Commission said that Germany is not ready to submit such information and will only develop the necessary technical infrastructure by the end of 2021.

According to the Commission, this will affect the capacity of other member states to fight fraud and will hinder the smooth functioning of the internal market. The Commission said that Germany is therefore considered to be in breach of the principle of sincere cooperation and to be failing to fulfill its obligations under the Administrative Cooperation Regulation.

If Germany does not act within the next two months, the Commission may send a reasoned opinion to the German authorities.

In January, the Commission sent letters of formal notice to 14 member states regarding implementation of the quick fixes.

TAGS: compliance | tax | business | European Commission | value added tax (VAT) | tax compliance | VAT legislation | VAT cross-border transactions | law | legislation | Germany | European Union (EU) | VAT compliance matters | Europe

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