The tax-exempt intra-Community supply of goods is subject to certain conditions and proof, such as the Certificate of Arrival (Gelangensbestätigung), CMR consignment note, or the “white” freight forwarder’s certificate.
With the abolition of customs duties in the EU single market, the concept of intra-Community supply was introduced, eliminating the procedures for export deliveries and import VAT. An intra-Community supply occurs when a business, in the course of its business activities, exports goods from one EU member state to another. This transaction results in what is known as an intra-Community acquisition. Consequently, the acquirer must pay VAT in the acquiring state, but can simultaneously offset this VAT against their own VAT liability as input tax.
The institution of intra-Community supply was introduced with the abolition of customs duties in the EU internal market, eliminating the procedures of export delivery and import VAT taxation. An intra-Community supply exists when a businessman, within the scope of their entrepreneurial activity, exports goods from one EU Member State to another EU Member State to a customer who is also a businessman. This process results in the so-called Intra-Community Acquisition. This, in turn, leads to the acquirer having to pay the VAT in the acquiring state, but at the same time being able to offset this as input tax against their VAT liability.
The tax exemption is, however, subject to certain conditions. For this to apply, it must be the case that:
- The goods are actually transported from one EU Member State to another EU Member State
- The recipient is also an entrepreneur and acquires the goods within the scope of their business
- The goods are also subject to VAT taxation in the acquiring country
Furthermore, the fulfillment of these conditions must be proven. For this purpose, the following must first be provided:
- An invoice must be presented, which shows the intra-Community supply and a corresponding reference to it
- The supplier must prove who the customer of the supply is
- The customer’s status as an entrepreneur must be proven. This is generally done by the supplier checking the customer’s VAT identification number. If a valid VAT identification number is available, corresponding proof can be assumed. In Germany, such a query can be made at the Federal Central Tax Office, for example, online at https://evatr.bff-online.de/eVatR/index_html
- In addition, since October 1, 2013, either a so-called Certificate of Arrival (Gelangensbestätigung) from the customer or an alternative proof document must be presented. The Certificate of Arrival proves that the goods actually arrived in the EU Member State of acquisition. The Certificate of Arrival must contain the following data:
- Name and address of the recipient / customer
- The commercial description of the goods and their quantity
- Confirmation of the date and place of receipt of the goods
- The date of issue of the confirmation
- The confirmation must be signed by the customer or a person authorized by them
- The intra-Community transfer of goods for permanent retention in another EU Member State is procedurally equated with the intra-Community supply
- The CMR consignment note and the “white” freight forwarder’s certificate are to be named as alternative proof documents.
- The CMR consignment note continues to be a valid proof for tax purposes. It must be signed by the freight forwarder’s client and contain a confirmation from the recipient of the receipt of the goods
- The so-called “white” freight forwarder’s certificate for intra-Community supplies distinguishes between two cases: the completed and the future intra-Community transport.
The freight forwarder’s certificate for future intra-Community transport must contain the following information.
- Name and address of the company commissioned with the transport
- Name and address of the supplying company and the client of the shipment
- The goods recipient and the destination within the EU internal territory
- The commercial description of the goods and their quantity
- An assurance from the transport company that the information was provided based on business records and is verifiable within the EU internal territory.
- The signature of the commissioned transport company
The freight forwarder’s certificate for completed intra-Community transport must additionally:
- Contain the month in which the transport of goods within the EU internal territory ended.
- The electronic dispatch protocol can be considered as further proof, provided that the transport from the order placement to the delivery can be seamlessly tracked using an electronic tracking system.
To comply with the reporting obligations, the sum of the tax-exempt intra-Community supplies must be stated in the VAT prepayment return.
If the exporting entrepreneur cannot meet the aforementioned conditions, they are obliged to subsequently pay the VAT in their own country.