For businesses transferring goods between EU countries to be held in stock or warehoused prior to use, there are special VAT rules affecting registration and compliance requirements.  Transferred goods still held within the control and ownership of the supplier are known as Consignment Stocks.  If the customer is instead effectively in control of the stocks - it is able to take the goods for the stores at will - then this is classified as Call-Off Stock.
Below is a summary of the VAT compliance and Intrastat reporting requirements for both.

vat on consignment stocks

When a supplier transfers its own stocks to another EU country to create a stock it controls, it can be treated as an intracommunity supply of goods and zero rated for VAT.  Since this transfer is effectively an acquisition of its own goods in another country, it must account for the acquisition VAT and movement of goods under the target country's rules.  There are a number of exceptions to this rule across the EU member states.  Typically, this requires a local VAT registration of the company in the target country as a non-resident trader.  Subsequently, the trader will need to file periodic VAT returns to report both the arrival of the goods and the onward sale to customers. 

Click here if you would like FREE guidance on the rules in the various EU countries.

Intrastat on consignment stocks

In addition to reporting the transfer of goods on the VAT returns, traders will be required to complete Intrastat filings in the target country once goods movements go over certain annual thresholds.  This reporting captures the 'acquisition' of the goods in the target country - as opposed to the domestic Intrastat reporting the trader will already be doing to record the 'despatch'.  Goods movements are recorded at cost, and filing is generally monthly.

Click here to check the annual Intrastat reporting thresholds in Europe

vat on call-off stocks

If the supplier moves the goods to another European state, and a single customer then takes control of the stock, the compliance requirements are reduced.  There is generally no requirement for a foreign supplier of the goods to VAT register as a non-resident in the target country.  The goods are treated as having been supplied from the country of departure as a zero-rated intracommunity supply.  If, however, the stocks are held in a warehouse facility controlled (i.e. owned or rented) by the supplier, they should be treated as consignment stock instead.  Further to this, the particular requirements in each country may not follow exactly the consignment & call-off treatments as detailed.  Instead, some member states treat all stocks, even those that could potentially be classified as call-off stocks as being consignment stocks, so care has to be taken to check this position in each country.

Intrastat on call-off stocks

When suppliers avoid the VAT registration requirement in the target country, due to the call-off stock rules, the responsibility to declare the arrivals to the Intrastat authorities usually passes to the customer who is controlling the warehouse facility.  Arrivals should be reported at the point of arrival in the target country, not when they are actually 'called off'.

Contact us for assistance

Click here for FREE guidance on the country-by-country VAT rules on consignment and call-off stock.

Or contact our global co-ordination centre:

enquiries@tmf-vat.com

Tel: +44 (0)870 067 8881