Consignment Stock Agreement Germany
Case law confirms that suppliers and customers must carefully consider what is contained in their confirmation storage contracts. The supplier could not have known that it was supplying supplies subject to VAT, since the supply was considered to be supplied where the stock is located. Or the customer cannot claim a deduction of input VAT, because the supply is not considered to be supplied where the stock is located. In the latter case, the customer may consider the exercise of a protection of legitimate expectations in accordance with Article 176 of the Tax Code. The Federal Ministry of Finance has granted a transitional period until 1 January 2019 to allow the taxpayers concerned to change their situation until the end of 2018 (Communication of 14 December 2017). As a result, suppliers and customers now need to check whether their deliveries of goods through consignment warehouses or other warehouses comply with the new rules or whether changes to agreements and procedures are necessary. This deadline has been extended until 31 December 2019. Indeed, from 1 January 2020, the EU`s “Quick Fix” for consignment camps will be implemented. The German deadline has been extended because there is no indication of this yet or how it is associated with the German amendments In October 2017, the Federal Ministry of Finance transposed the Bundesfinanzhof`s opinion on the treatment of turnover tax on supplies of goods via consignment warehouses (press release of 10 October 2017) into the Turnover Tax Circular. Under these new rules, the foreign supplier no longer has to be registered for VAT in Germany in the following circumstances: Please contact us now if you are affected by the aforementioned development or if you would like to discuss the impact that the use of deposit camp simplification schemes may have on your business. On 11 October 2017, the German tax authorities published guidelines on the introduction of a simplification scheme for the provision of consignment camps to Germany. As far as VAT compliance in the EU is concerned, there are two types of stock regimes.
Below is a summary of how they are applied in Germany: according to the new information, tax authorities should consider the delivery of goods from Member States to a consignment warehouse in Germany as a single transaction involving the purchase of goods from another Member State. However, the court decided that the customer to whom the goods were to be delivered had to be known at the time the goods were sent. Another condition made by the Tribunal was that goods in a consignment warehouse could only be stored there for a short period of time, usually for a few days or weeks. The time requirement is a bit vague, so we have to wait for the actual application in practice. In the information provided by the Federal Ministry of Finance, it is also stated that the customer should have his domicile in Germany before the shipment of the goods. . . .