Turnover tax measures effective 2020
The supply or lending of physical books, daily papers, weekly magazines and other periodicals already comes under the reduced value-added tax rate. From the first of January 2020 onwards said reduced rate is likewise to apply to digital publications as well as to the granting of access to news web sites.
The value-added tax rules for cross-border or intra-Community transactions are to undergo revision in connection with the Council Directive (EU) as regards the Harmonisation and Simplification of (certain rules in the value added tax system for the taxation of) Trade between Member States. The changes will affect the following areas:
- the value-added tax regulations governing stocks kept by an entrepreneur in a different Member State for call-off by any of the entrepreneur’s regular customers;
- a “chain transaction” scheme in determination of which of the supply transactions making up the chain in question should be regarded as the intra-Community transaction;
- proof in corroboration of the intra-Community transport of products to other Member States; and
- the status of the value-added tax identification number.
Arrangement for on-call stocks
In the event that an entrepreneur needs to have particular products in stock in a particular Member State, he can decide to move them there from another Member State. Any such relocation of products brings about a fictitious intra-Community supply transaction. It is compulsory for the entrepreneur to account for these transactions in his turnover tax returns and his periodical intra-Community supplies statements. Intra-Community acquisitions are required to be accounted for as supplies that are liable for value-added tax locally, in the Member State where the products end up. The subsequent supply of the products to the buyer thereof brings about an obligation to file the relevant tax return. As long as the entrepreneur is aware of the identity of the (ultimate) buyer of the products kept in stock locally before said products are physically relocated, this will do away with the registration and tax filing duties in the Member State where the stocks are merely kept.
Chain transaction scheme
So-called chain transactions consist of consecutive supply transactions between different entrepreneurs involving the same products which feature just the one intra-Community transport transaction or intra-Community shipment. It does not matter how few or many links make up the chain or how few or many the Member States are in which the various entrepreneurs involved are based or are value-added tax registered. The transport or shipment of the products kicks off at the level of the first entrepreneur who supplies as part of the chain involving the products travelling direct to the final recipient in the chain. The scheme helps identify the supply transaction forming part of the chain to which the intra-Community transport or shipment is to be attributed. It is this supply transaction which will be designated as the intra-Community supply transaction. The scheme has been designed with the aim of avoiding transactions either being taxed twice or not being taxed at all.
Proof in corroboration of intra-Community shipment or transport based on rebuttable presumption
One of the conditions governing the application of the nil rate for intra-Community supply transactions is the shipment or transport of products from one Member State to another. Proof of the product actually having left the Member State has relevance where it concerns the application of the nil rate. From 2020 onwards a total of two non-conflicting supporting documents will be deemed to suffice as proof of the products having been shipped or transported from the territory of the supplying Member State.
Value-added tax identification number
Several CJEU rulings have confirmed the presence of an accurate value-added tax identification number as not having to date been a requisite for the application of the nil rate. As an accurate value-added tax identification number has relevance in terms of the traceability of the product and service flows and the value-added tax payments, however, it has been decided from 2020 onwards that the disclosure of an accurate value-added tax identification number should be included as a condition for the application of the nil rate, as should the filing of accurate periodical intra-Community supplies statements (disclosure of an accurate value-added tax identification number being inherent to filing an accurate ICP statement).
Dutch version: Maatregelen omzetbelasting 2020