As of 1 January 2020 the VAT exemption for intra-Community supplies of goods can only be applied if the buyer has communicated a valid VAT number to his supplier, attributed by a Member State other than that in which the transport begins. This has some practical consequences.
Up to now, it was only required that the customer qualified as a taxable person or a non-taxable legal person who acts as such in another EU Member State and who is obliged to declare his intra-Community acquisitions in that Member State. The fact that the customer provided the supplier with a valid VAT number was generally accepted as proof of this status, but was – until now – not a material condition for the application of the VAT exemption.
Furthermore, the VAT authorities will be able to reject the VAT exemption if the supplier has not or has incorrectly included the transaction in the IC sales listing, unless this can be justified to the satisfaction of the VAT authorities (e.g. if the supplier can prove that he acted in good faith and has by mistake included the supply in an IC sales listing related to a later period).
What does this mean in practice?
- If the customer does not communicate a VAT number of another EU Member State, the supplier is obliged to charge VAT on this supply, even if the customer qualifies as a taxable person (e.g. if the customer has submitted a VAT registration request, but has not yet obtained that VAT number). The fact that the supplier charges VAT on this supply, does not change anything to the obligation of the buyer to report an intra-Community acquisition.
- This does not necessarily mean that the customer has to communicate a VAT number from the EU Member State to which the goods are transported. It is sufficient to provide a VAT number from another EU Member State than the one in which the transports starts.
- There are no specific rules on how the customer should communicate his VAT number. This communication should therefore not be demonstrated in a specific way. If the supplier has mentioned the buyer’s VAT number on his invoice, it can be assumed that the buyer has communicated this VAT number. It is neither required that the VAT number is communicated separately for each individual transaction.
- If the customer subsequently communicates a VAT number that was valid at the moment the VAT on the intra-Community supply became due, the supplier should issue a credit note and a new invoice. This is important, as the customer will normally not be able to recover the VAT charged on the intra-Community supply.
- According to the draft Explanatory Notes of the European Commission, only the VAT number of the VAT group should be used for intra-Community supplies to a VAT group. However, note that article 53 quarter, §4, lid 2 of the Belgian VAT code currently still stipulates that a member of a Belgian VAT group must provide the supplier with his ‘sub VAT number’.
From 1 January 2020, it will therefore be even more important to verify the validity of a customer’s VAT number on a regular basis, and to keep evidence of this. Indeed, the VIES database currently does not allow to verify whether a VAT number was actually valid on a specific date in the past.