VAT quick fixes (part 4): documentation of intra-Community transactions

5 August 2019

VAT quick fixes (part 4): documentation of intra-Community transactions

Przemysław POWIERZA
Tax Partner at RSM Poland

As of 1 January 2020, the entire European Union (EU) will have uniform principles for documenting any transport of goods between the Member States of the Community under the intra-Community supply (ICS).

In early October 2018, the EU’s Economic and Financial Affairs Council adopted draft legislation introducing temporary solutions (known as ‘quick fixes’) for settling cross-border transactions in the European Union. They will be applicable from 1 January 2020 and shall be in force until a new, definitive VAT system is adopted. After the chain transaction amendment we discussed in the previous article (part.3), the next essential change brought by quick fixes is a common framework for documentary evidence required to claim VAT exemption for a given transaction (the Polish equivalent is the 0% rate) in the case of intra-Community supplies. This change affects basically all taxpayers involved in intra-EU trade of goods.

Conditions to be met

The Intra-Community supply (ICS) is a transport of goods from the territory of Poland to the territory of a Member State other than Poland for the benefit of a VAT taxpayer. If an ICS is to be exempt from VAT in the form of the 0% VAT rate, both the acquirer and the vendor must meet pre-defined conditions. One of the basic requirements is a valid VAT number for the purposes of intra-Community transactions, whereas the taxpayer who performs the supply must have proper documentation.

In the face of a growing number of fraudulent transactions between taxpayers from different EU countries, Member States would often decide to adopt regulations that are more stringent than EU legislation in this field. As a result, these regulations became a threat to free trade within the Community. Thus, the only plausible solution was to make legislation applied in different countries uniform. Owing to this, entrepreneurs will no longer suffer from ‘headaches’ when adjusting to the regulations in force in a given country and providing appropriate documentary evidence of transporting goods to another Member State in their supplies. The underlying assumption of the new regulations is that only once specific conditions are met (as discussed below), a supply recognised as an intra-Community supply within the meaning of VAT regulations is deemed to have taken place.

Firstly, there are two groups of documentary evidence of goods transport. The first one covers the following documents:

  • CMR signed by the recipient of the goods,
  • bill of lading,
  • airfreight invoice,
  • invoice from the carrier of goods.


Not that much into finance and taxes but overwhelmed by documents you’re not sure how to read?

The second group of documentary evidence includes:

  • an insurance policy with regard to the transport or dispatch of the goods or bank documents proving payment of the transport or dispatch of the goods,
  • official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the Member State of destination,
  • a receipt issued by a warehouse keeper in the Member State of destination confirming the storage of the goods in this Member State.

It shall be presumed that the goods have been dispatched or transported by the vendor or a carrier who was commissioned to deliver them and he is in possession of:

  • at least two items of non-contradictory evidence from the first group issued by two parties independent of each other, or  
  • any single item of evidence from the first group in combination with any single item of non-contradictory evidence from the second group; these items of evidence must confirm that the goods have been dispatched or transported; as in the first case, items of evidence must be issued by two parties independent of each other.

What is more, if the goods are dispatched or transported by the acquirer or a third party on his behalf, a written statement from the person acquiring the goods that the goods have been dispatched or transported, and referring to the Member State of destination of the goods, will be needed apart from the aforementioned documents. This written statement shall state the date of issue, company name or name and surname of the acquirer, the quantity and nature of the goods, the date and place of the arrival of the goods and in the case of supply of means of transport, its identification number and identification of the individual accepting the goods on behalf of the acquirer.

The acquirer shall be obliged to furnish this written statement to the vendor by no later than the tenth day of the month following the month of the supply. If any of the above conditions is not met, the vendor shall not apply the exemption (the 0% rate) in the ICS. The goods shall be taxed with a relevant VAT rate according to the principles of domestic sale.

The changes brought by quick fixes also affect the burden of proof. If tax authorities wish to challenge a given intra-Community supply, they will have to prove that it does not meet the conditions set forth in the regulations. Only then the taxpayer may be denied the right to VAT exemption (the 0% rate) in ICS.

VAT identification number as a material prerequisite

In accordance with the amended regulations, the information about the EU identification number for VAT purposes available in the VAT Information Exchange System (VIES) shall not only be a formal condition, but also a material prerequisite for VAT exemption (the 0% rate) in ICS. At present, the lack of VAT-EU number in itself cannot undermine the right to apply the 0% rate (exemption with the right to deduction), provided that the material prerequisites of ICS have been met. However, according to the new standard, if the vendor does not identify the contractor in the VIES system, he shall be denied the right to VAT exemption (or to apply the 0% rate). The EU legislator leaves an option here for taxpayers; namely, they can prove they had acted in good faith despite formal shortcomings concerning the VIES entry. Thus, the supply that has taken place shall be deemed as ICS with the right to VAT exemption (0% rate), provided that the vendor can prove to the authorities that he had acted in good faith.


With this post we finish a series of articles dedicated to different quick fixes that will become applicable as of early 2020 in the entire European Union. These changes are first and foremost supposed to make the EU VAT system more effective as we are heading towards the definitive solution, but also to make life easier for taxpayers, in particular those taxpayers whose businesses cooperate with contractors from different EU Member States. The time to prepare for the new regulations is running out; therefore, it is a good idea to learn about them now.

Our domestic legislator has already engaged in the implementation of quick fixes to the Polish legislation and presented a draft act on quick fixes. Will the domestic regulations meet the expectations of taxpayers? We are going to discuss this soon, so we encourage you to follow our blog carefully.

Subscribe to RSM Poland Newsletter to stay up-to-date on all legal, financial and tax matters. Benefit from the expertise of our professionals.


Przemysław POWIERZA
Tax Partner

Powiązane usługi