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Federal Ministry of Finance comments on the new regulation of consignment warehouses

26Jan

As of 1.1.2020, the regulations in the EU on deliveries via warehouses have been standardized and simplified. The Federal Ministry of Finance (Bundesministerium der Finanzen - BMF) has now commented on this.

What is at stake?
Deliveries via warehouses in other EU member states are generally recorded for VAT purposes as follows: The transport of the goods to the warehouse must be declared by the supplier in Germany as an intra-Community transfer, and in the other EU member state as an intra-Community acquisition. If a delivery is subsequently made from this warehouse, this is subject to turnover tax in the other EU member state. Disadvantage: The supplier must register in the other EU member state and declare there.

Consignment stock regulation
Since 1.1.2020, a simplification regulation has been created for this purpose. Under certain conditions, the withdrawal from the warehouse is treated as an intra-Community supply at the time of withdrawal; the recording of the intra-Community transfer in Germany is not required.

BMF letter
On 13 pages, the BMF now - rather late - takes a position on the "consignment stock regulation". Particular attention should be paid to the new Section 6b.1 of the Turnover Tax Application Decree (Umsatzsteuer-Anwendungserlass - UStAE), which explains the essential requirements for making use of the regulation, among others

the concept of consignment warehouse, which may also include mobile warehouses (e.g. containers).
the problem of own warehouses or leased warehouses operated with own funds in the other member state. These constitute a place of residence within the meaning of the regulation and are therefore contrary to it.
the transport of the goods, which must be carried out by the supplier or a third party commissioned by him. This may also be the purchaser if the transport is expressly and recognizably carried out on behalf of the supplier.
the details of the determination of the 12-month period in which the goods must be removed. Thus, the period begins on the day following the end of transportation. If this falls on the weekend or a holiday, the start is postponed to the next working day. For certain goods (liquids, gases, bulk goods), the period can be determined by means of the FIFO principle (first in - first out).
the treatment of shrinkage in the warehouse. This is tolerated if it is usual and customary in the industry (so-called "small losses"). The BMF grants an exemption limit of 5% of the total stock (in terms of quantity and value).
the obligation to register immediately in the Member State in which the warehouse is located if the conditions are no longer met. However, this is to be considered object-related, i.e. the non-fulfillment of the prerequisites for an individual object does not lead to a general denial of the simplification regulation.

Consequence
Given the size of the letter, we can only point out selected aspects. The simplification rule must be applied if the prerequisites are met. Those who do not wish to apply it must therefore ensure that they do not meet one of the conditions. Therefore, not only those entrepreneurs who already use the regulation or intend to do so should deal intensively with the letter. On a positive note, the BMF also allows the simplification rule to be applied if the customer has already placed a binding order and paid for the goods, provided that its application has been agreed, e.g. in a framework agreement. This avoids conflicts with the case law of the Federal Fiscal Court, which in such constellations assumes an intra-Community supply at the beginning of the transport of the goods and not only at their removal from the warehouse. One thing is certain: meeting the requirements is a complex matter that must be well prepared and continuously monitored. Our experts will be happy to assist you in this regard.