In this month’s meeting of the Economic and Financial Affairs Council (ECOFIN), held in Brussels on 4th December, and further to discussions held in June and October, ministers finally adopted the directive on the four short-term improvements, also known as “quick fixes”, to the EU VAT system.
The “quick fixes” are simplification rules for the EU VAT rules relating to cross-border transactions. Their aim is to improve the day-to-day working of the current VAT system and make life easier for businesses by providing them with legal certainty.
The quick fixes relate to the following:
- Simplification and harmonisation of rules regarding call-off stock;
- The VAT identification number of the customer becoming a substantive condition for exempting the intra-Community supply of goods;
- Simplification of chain transactions to enhance legal certainty by establishing uniform criteria; and
- Harmonisation and simplification of the rules relating to the need to provide documentary evidence as proof of an intra-Community transport of goods for the purposes of applying the VAT exemption.
These improvements will apply as of 1st January 2020 until the introduction of the definite VAT system, which is expected to shift to a destination-based regime and will replace the current transitional VAT arrangements.