Germany | Companies Delivering Consignment Stocks Have a Lengthened Transitional Period to New Rules until December 2019

On 11th October 2017, the German tax authority published guidance on the introduction of a simplification scheme applicable to deliveries of consignment stock into Germany.

At this time a foreign company that transferred consignment stock into Germany was generally required to register for German VAT. This was because the transaction was treated as an import or as an intra-Community acquisition by the company of its own goods, followed by a domestic supply to a customer.

The German tax authority’s revised position provided for a simplification scheme under which a direct supply of consignment stock into Germany from other Member State was deemed a direct intra-community supply. This meant that companies delivering goods to their customers via consignment stock operations were freed from the requirement to register for local VAT in Germany.

The new rules had effect from 1 January 2018 but it was agreed that for acquisitions before that date, either the old or new rules could be applied.  This “transitional” period was further extended to the end of 2018 in order to give companies time to adapt to the new rules.

Now, this deadline has been further extended to 31st December 2019.  This is because from 1 January 2020 the EU’s “Quick Fix” for consignment stock is meant to be implemented.  The German deadline has been extended because as yet there is no guidance on this or how it interacts with the German changes

Please get in touch with us now if you are affected by the above development, or would like to discuss how using consignment stock simplification schemes may impact your business.