EU tightens legislation on VAT-free trade
Going forward, documentation requirements for VAT-free trade will be aligned across the EU.
So far, it has been up to each EU country to decide what the documentation requirements for VAT exemption for goods deliveries should consist of. The EU is now implementing new legislation in this area.
As of January 1st., 2020, requirements for VAT exemption documentation in EU trades will be aligned. Legislation will therefore basically become uniform regardless of which EU country the goods are delivered to.
The documentation requirements for VAT-free trade differ depending on whether the transport is carried out by the seller (or at the seller's expense) or by the buyer (or at the buyer's expense).
The new legislation therefore does NOT contain stricter requirements for the freight forwarder. The stricter requirements are aimed at the transport organizer, having to document that transport has been completed.
Documentation requirements when the transport is carried out by the seller
If the shipment is carried out by the seller (or at the seller's expense), the seller must have at least two non-conflicting evidence from an exhaustive list where the evidence is issued by two independent parties. At least one proof must relate to the transport of the goods.
Transport documents, of which there must be at least one:
- Signed CMR shipping letter
- A bill of lading
- An air freight letter, or an invoice from the carrier of the goods.
Other documents, of which there must be at least one, unless there are two transport documents issued by two independent parties, must be:
- An insurance policy regarding the goods transport or bank vouchers for payment of same.
- Official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the EU country of destination.
- A receipt issued by a warehousekeeper in the destination confirming the storage of the goods in that EU country.
Documentation requirements when the transport is carried out by the buyer
If the shipment is carried out by the buyer (or at the buyer's expense), the seller, in addition to having two non-conflicting documentation, at least one of which must relate to the shipment of the goods, must have a written statement from the buyer (recipient's declaration). The two pieces of evidence that must be available are from the same list as the seller must have if the seller handles the transport - see above.
The statement from the buyer must contain:
- An indication that the goods have been transported by the buyer himself (or at the buyer's expense)
- Which EU country the goods are entering
- Issue date
- Buyer's name and address
- The quantity and nature of the goods
- The date and place of arrival of the goods
- Vehicle registration number
- Identification of the person who received the goods on behalf of the buyer
You might already be covered
Companies in Denmark are required to store transport invoices and payment vouchers for five years. As these two documents constitute sufficient documentation to meet the new requirements, it is our recommendation that you continue to meet these requirements, thereby being on the safe side about documentation for VAT-free trade in the EU.
If you do business out of another EU country, we encourage you to make sure you have the proper documentation according to new regulations.
If you have any questions about the new documentation requirements, please contact us.