The solution adopted states that:
- The dispatch of goods to stock is a "non-transfer" which therefore does not require registration in the country of arrival of the goods
- An exempt intra-Community supply in the country of departure and a taxed intra-Community acquisition in the country where the stock is located only occurs at a later stage when the purchaser takes possession of the goods
Companies wishing to apply this so-called simplification regime will nevertheless have to be careful as no slip-ups will be allowed. As the ink is barely dry on the law, the European Commission has had to publish an explanatory note in an attempt to (already) put out the fires. In addition, many practical questions remain unresolved or have been the subject of attempts to reach a compromise in various VAT committees. For example, the issue raised by many sectors (especially those selling perishable goods) in the event of loss or destruction of part of the goods. The new Directive does not provide for any tolerance in respect of loss, destruction or theft. The VAT Committee has agreed on this issue... almost unanimously! It is therefore easy to imagine the reaction of the tax authorities in some countries (such as Poland or Hungary) if they were to discover during an inspection that a small part of the stock could not be sold to the purchaser because it was destroyed, lost or stolen.