VAT reform in the EU: Quick-Fixes will be implemented as of 2020



In October 2017, the Commission presented the EU plans for a fundamental value added tax (VAT) reform within the EU. The first measures were realized at the end of 2017 and concerned especially the e-commerce as of 2019 and mail order business as of 2021. One year later, on 2nd October 2018, the EU ministers of finance agreed on further steps.

I. The Quick-Fixes

The quick-fixes are meant to improve the current system before the final phase of the reform with its general changeover to the destination principle takes place. The following measures shall come into force as of 1st January 2020:

Harmonization and simplification of deliveries via consignment stocks (call-off stocks)

 According to the initial regulation of deliveries through consignment stocks, the intra-community supply (supplier) resp. the intra-community acquisition (customer) occurs after the goods have been taken off the stock by the customer. The same applies, if the goods are still on stock after a twelve-month period of warehousing. The supplier and the customer have to fulfil extensive recording obligations to monitor this procedure. Presently, such deliveries in the EU are treated in different ways. While some member states allow simplification regulations, from the German legislation’s view the supplier is currently obliged to declare the goods in the EU countries. This obligation will be omitted in the future.

Harmonization of cross-border intra-community chain transactions

Pursuant to the initial regulation of intra-community chain transactions the very first delivery is basically seen as delivery with movement which is treated with a potential tax-exemption. However, under certain circumstances the delivery of the first buyer (intermediate trader) can alternatively be treated as the delivery with movement. Among other preconditions it is nec-essary that the buyer informs the supplier about the VAT number of the member state where the supply/dispatch of the goods starts. Due to a missing uniform regulation different opinions arose about the treatment of intra-community chain transactions – not only between the single member states but also between the German fiscal authority and the resident fiscal courts, which makes an appropriate declaration almost impossible. This should belong to the past as of 2020.

Harmonization of proofs for tax exemptions of intra-community supplies

This regulation should enable to provide EU wide uniform proofs without paying consideration to specific national regulations. Insofar a simplification is achieved, but not with regard to the scope of proofs to be provided.

Verification of the VAT identification number as material requirement of tax exemption of intra-community supplies

While the inspection of the VAT identification number and its registration in the recapitulative statement is already a necessary precondition in order to be granted certain tax exemptions, the judicature permitted exceptions. From now on however, this will no longer be possible. Companies disregarding these “formalities” lose their tax exemption, even if the delivery can be clearly defined as an intra-community supply. The new regulation therefore represents a tightening of the verification requirements.

II. Reduced tax rates for electronic publications

Member states are allowed to provide electronic publications at a reduced tax rate. This enables them to be treated similarly to print media, making the complicated settlement of bundles (a combination of print version and electronic version) no longer necessary. According to a press release of the Ministry of Finance this shall be quickly realized.

III. General reverse charging of tax

Member countries which are particularly affected by tax fraud are allowed to temporarily im-plement a general reverse charge system for domestic turnovers exceeding € 17,500.

IV. Tightening of cash transfer monitoring within resp. outside the EU

The regulation extends the present regulations in order to close detected loopholes.

Information for the certified taxpayer

The originally planned introduction of the certified taxpayer is not part of the package of measures. The decision shall be met at a later stage of time.


The measures are expected to be realized as an agreement has been reached. Even though simplifications are partially achieved, in a first step this entails a considerable adjustment for the companies as the new regulations entirely or partially do not correspond to the present national legal situation. This concerns all operational processes, the accounting, the computing, invoicing, sales, logistics, purchases, etc. It is necessary to check e.g. if due to the new regulation of chain transactions and deliveries via consignment stocks, the transport routes, delivery conditions etc. should be modified in the future. Companies with activities in other member countries should check in regular intervals whether the optional regulations (II. and III.) will be implemented. We are glad to support you concerning this topic – also within the group of Nexia partners.


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