Intra-EU B2B VAT for stocklot traders: 0% supplies, VIES and proof of transport

Stocklots cross borders all the time: a Dutch trader sells pallets to a buyer in Poland, a German retailer sells returns to a trader in Belgium. Inside the EU, a sale of goods from a business in one member state to a VAT-registered business in another is normally an intra-Community supply. The seller invoices without VAT, and the buyer accounts for VAT in their own country. It is simple once you know the conditions, and expensive if you get them wrong: when the conditions are not met, the seller owes the VAT they did not charge.

The basic mechanism

• Seller: makes an exempt intra-Community supply (often called "0% VAT"). No VAT on the invoice. The seller reports the sale in their VAT return and in their recapitulative statement (EC Sales List, in the Netherlands the ICP-opgaaf).
• Buyer: makes an intra-Community acquisition in their own country. They declare the VAT on the purchase in their own VAT return and, if they are entitled to it, deduct the same amount in that return. For a fully taxable trader the net effect is usually zero.

People often call this "reverse charge". Strictly, reverse charge is the term the VAT Directive uses when the customer has to pay the VAT on a supply, for example for many services. For goods moving between member states, the seller's side is an exempt supply and the buyer's side is a taxable acquisition. The practical result is the same: no VAT from the seller, VAT accounted for by the buyer.

The conditions for 0%

Under Article 138 of the VAT Directive (2006/112/EC), as tightened from 1 January 2020, the seller can only apply the exemption when all of the following are true:

1. The goods are transported to another member state, by the seller, the buyer or someone on their behalf.
2. The buyer is a taxable person (a business) acting as such, and is identified for VAT in a member state other than the one the goods leave from.
3. The buyer has given the seller their VAT number, and the seller has it on file.
4. The seller lists the supply in their recapitulative statement with the correct details. If they don't, the exemption can be refused, unless the seller can justify the failure to the tax authority.

If any condition fails, for example the buyer has no valid VAT number or the goods never leave the country, the seller must charge their local VAT. The Dutch tax authority lists the same conditions on its page on intra-Community supplies from the Netherlands.

Checking the VAT number in VIES

VIES is the European Commission's system for checking whether an EU VAT number is valid for cross-border trade. Check before you invoice, every time with a new buyer and regularly with existing ones:

• Go to the VIES service, choose the member state and enter the number.
• Check that the result is valid and that the name and address match the company you are dealing with. Some member states do not return a name; then ask for a VAT registration certificate.
• Enter your own VAT number as requester. VIES then gives a consultation number, which is proof that you checked that number on that date. Save it, or a screenshot or PDF, with the invoice.
• Watch for VAT numbers from one country combined with a delivery address in a third country, and numbers registered very recently. They are not wrong by definition, but they are where VAT fraud often starts.

What the invoice must show

Article 226 of the VAT Directive lists what every VAT invoice must contain. For an intra-Community supply, check in particular:

• Your own VAT number and the buyer's VAT number.
• A unique, sequential invoice number, the invoice date and the date of supply if different.
• Full names and addresses of both parties.
• Quantity and description of the goods. For a stocklot, refer to the manifest, for example "Customer returns, 12 pallets, as per manifest dated 14 October".
• The taxable amount, VAT rate 0% or "exempt", and VAT amount nil.
• A reference to the exemption, for example "Intra-Community supply, exempt under Article 138 of Directive 2006/112/EC", or the matching national provision.

For intra-Community supplies, the invoice must be issued no later than the 15th day of the month after the month of supply (Article 222). National rules may add details or language requirements; in the Netherlands, see the Belastingdienst page on calculating VAT on goods to EU countries.

Proof of transport

The seller must be able to show that the goods actually left the country. Since 2020, Article 45a of Implementing Regulation (EU) No 282/2011 gives a presumption of transport when the seller holds:

• At least two non-contradictory documents from two different parties that are independent of seller and buyer, such as a signed CMR consignment note, a bill of lading, an airfreight invoice or an invoice from the carrier; or
• One of those documents plus one other item of evidence, such as an insurance policy for the transport, bank records showing payment for the transport, an official document from a public authority confirming arrival, or a receipt from a warehouse keeper in the destination country.

When the buyer arranges the transport (EXW or FCA, common in stocklot deals), the seller also needs a written statement from the buyer confirming that the goods were transported to the destination member state. It must state the date of issue, the buyer's name and address, the quantity and nature of the goods, the date and place of arrival, the identification number of the vehicle where relevant, and the person who accepted the goods on the buyer's behalf. The buyer must provide it by the tenth day of the month after the supply.

Meeting the presumption is not the only way to prove transport, but it is the safest. Tax authorities can still rebut it, for example when documents turn out to be false. If a buyer collects with their own van and cannot give you the documents, many sellers ask for a deposit equal to the VAT, refunded once the proof arrives.

Typical pitfalls in stocklot deals

• Goods stay in the country. If the buyer resells the lot locally before it leaves, there is no intra-Community supply. You owe local VAT.
• Chain sales. If A sells to B, B sells to C and the goods go straight from A to C, only one of the supplies in the chain can be the exempt intra-Community supply. Which one depends on who arranges the transport. Get advice before you invoice at 0% in a chain.
• Wrong VAT number. A buyer gives the number of a sister company in another country. The number must belong to the buyer on the invoice.
• Missing recapitulative statement. Forgetting to list the supply in the EC Sales List can cost you the exemption.
• Excise goods. Alcohol and tobacco have their own excise rules on top of VAT. 0% VAT does not mean excise-free.

Buying from another EU country

As a buyer, give the seller your VAT number before the invoice is made, make sure it is valid in VIES, and provide the transport documents or signed statement the seller needs. Record the acquisition in your own VAT return. If you do not have a VAT number, the seller will normally charge their local VAT. Our buying guide covers Incoterms and payment; our selling guide covers terms for sellers.

Looking for stock from another EU country? Browse stocklots by category and location, or post a buyer request. Prices on BrandedStocklots are set by sellers; check whether a listing price includes VAT before you agree a deal.