Date 1 July 2020 the provisions amending the institution known to date in the Consignment Magazine have become applicable in the Polish VAT Act. These are new regulations referred to as call-off stock magazine. The changes introduced may be important for traders moving goods between EU Member States.
The new rules are the result of the implementation of Council Directive (EU) Directive 2018/1910 of 4 December 2018. Now. first comparison of provisions which were in force until the date 30 June 2020 and those applicable from 1 July This year, it points out that they are intended to simplify the whole procedure and to enable more taxpayers to use it.
The following is a summary of what has been the procedure of the Consignment Magazine so far and of the most important changes.
Entered from 1 July 2020 the provisions provide for a new reporting obligation for the operator sending the goods to a call-off stock warehouse. Namely, it is to submit a VAT-EU summary information in the country of dispatch, at the time of shipment of the goods, stating the VAT number of the future buyer of the goods
Consignment warehouse procedure
The Consignment Magazine procedure made it easier for entrepreneurs who supply goods abroad within the EU community. The application of this procedure, subject to certain conditions, allowed for the avoidance of the continuity of VAT registration in another EU country to which the goods were supplied.
The mechanism provided that the supplier had sent the goods from the territory of the country to another EU Member State, to a Consignment Warehouse operated by the operator, the consignee of the goods. At this point, the consignor did not have a VAT obligation or a VAT registration in the country of destination.
Only the collection of goods from the consigning warehouse by the warehouse operator created a tax obligation and the need to identify WDT and WNT respectively by the parties to the transaction.
What's changed
Until the entry into force of the amendments, the operator who sent the goods for the application of the procedure in question could not be registered for VAT purposes in the Member State to which the goods were dispatched. After the changes, it no longer has to meet the condition of no VAT registration in the country where the call-off stock is kept. It may be registered in that country, but may not have its registered office or permanent place of business.
To date, simplifications in connection with the use of the warehouse were not provided for commercial goods, but only for goods intended for production or service activities. Currently there are no longer any restrictions in this respect and goods moved in this call-off stock procedure can be further resold.
Another amendment provides that a call-off stock warehouse no longer needs to be operated exclusively by the customer of the goods, but can also be operated by the entity third, which will certainly benefit from this simplification also by an entity which has not yet been able to run a consigning warehouse.
It will be easier to keep a call-off stock store itself, because the storekeeper no longer has to notify the head of the tax office of his intention to keep the warehouse before first putting the goods in storage. On new terms, he will have such notice 14 days from day first the introduction of goods into storage.
The owner of call-off stock may be replaced by another entity during the procedure and this will not result in a loss of simplification resulting from this procedure.
The warehousekeeper will have to keep detailed records of the goods, which has been defined by Council Implementing Regulation (EU) 282/2011.
The new provisions provide that if within time 12 the right to dispose of the goods has not been transferred to the Member State from which they were originally dispatched and the consignor of the goods to the warehouse has registered their re-location is deemed not to have taken place intra-Community acquisition of the goods.
Direction of changes
The changes described above should be assessed positively. First of all, they offer an opportunity to use a simplified procedure for more taxpayers. However, some inconveniences should be noted.
Well introduced from 1 July 2020 the provisions provide for a new reporting obligation for the consignor to send the goods to the call-off stock warehouse, in the form of a need to submit Summary Information in the country of dispatch, when the goods are moved, specifying the VAT number of the future buyer of the goods.
In addition, by way of the amendment, the maximum storage period for goods in the call-off stock warehouse without a tax obligation is now 12 months, while earlier this was a period 24 months.
Finally, we pay attention to a provision that indicates that the expiry of the maximum storage period, loss or destruction of the goods means the need to demonstrate the WNT for the shipment of its own goods by the operator sending the goods to the warehouse.
This change may have negative consequences for taxpayers who, without often having an impact on the loss or destruction of the goods sent, will be required to demonstrate the so-called non-trade WNT.
In particular, this may be acute for taxpayers operating in the FMCG sector, in which, in practice, the goods dispatched are exposed to corruption.
Author: Rafał Dąbrowski
Lawyer, tax adviser included on the list of National Tax Advisory Board and licensed restructuring adviser. At Russell Bedford in charge of the Department of Tax Advisory. Author of numerous tax-related articles published in the industry press.