There have been some changes to the procedures and documentation required for the zero rating of B2B intra EU supplies, intended to harmonise and simplify some areas across the EU.
Previously the rules on the evidence required to prove a supply is an intra-EU supply (and thus benefits from being zero-rated) differed between EU Member States. Now all States must follow the same rules. In many cases this will have little impact on UK businesses as the UK was largely already in line with the new rules.
Suppliers must now 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. That might sound quite onerous but evidence can be:
- the customer’s order (including customer’s name, VAT number and delivery address for the goods)
- inter-company correspondence
- copy sales invoice (including a description of the goods, an invoice number and customer’s EU VAT number)
- advice note
- packing list
- commercial transport documents from the carrier responsible for removing the goods from the UK, for example an International Consignment Note (CMR) fully completed by the consignor, the haulier and signed by receiving consignee
- details of insurance or freight charges
- bank statements as evidence of payment
- receipted copy of the consignment note as evidence of receipt of goods abroad
- any other documents relevant to the removal of the goods in question which you would normally get in the course of your intra-EU business
The documents you use as proof of removal must clearly identify the following:
- the supplier
- the consignor (where different from the supplier)
- the customer
- the goods
- an accurate value
- the mode of transport and route of movement of the goods, and
- the EU destination
- Vague descriptions of goods, quantities or values are not acceptable.
- If the evidence is found to be unsatisfactory you as the supplier could become liable for the VAT due.
From 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 (already standard practice in the UK), and
- The transaction must be included on the supplier’s EC Sales List.
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.