Proof of shipment necessary for intra-EU trade
Intra-Community supplies of goods are exempted from VAT if your company may evidence that the goods have effectively been transported outside Belgium. This proof may be provided by a set of common concurring documents (contract, purchase order, international payment, transport document, etc.).
The transport document (CMR) constitutes an irrefutable proof that the goods have been dispatched outside Belgium. However, VAT disputes frequently arise in case of VAT audit when the provider has an incomplete transport document (CMR) (e.g. missing signature of the client) or when the client ensures himself transportation of the goods (EX-Works sale) and he does not send a copy of the CMR to the provider.
Simplification's rules in Belgium...
The Belgian VAT Authorities have simplified the proof of intra-Community transport of goods. The so-called « destination document » has been implemented in the Belgian VAT Code as an alternative to the transport document is the "national" presumption of proof of cross-border transport.
...under strict conditions
A "destination document" should be considered as "valid" provided the following conditions are met:
- The destination document should normally be issued for each intra-Community supply of goods. It is however possible to report all intra-Community supplies performed within a period of maximum three consecutive calendar months in one single document ;
- The destination document must comprise several mandatory mentions. The person responsible for the reception of the goods, due to his/her administrative position within the buyer’s company, is deemed to be aware of the purchases made by said company. This person [e.g. Head of accounting department], appointed by the purchaser for this purpose, certifies the accuracy of the information reported in the destination document with the following mention « Received on behalf of [purchaser’s name] ». This person indicates his/her name as well as the date of reception of the goods and signs the document. Beforehand, the supplier must require from the purchaser the confirmation of the identity and the function in the company of the abovementioned person by email, letter or any other written document.
It is therefore essential that the person who signs the document on behalf of the client is readily and precisely identifiable.
The VAT expert's eye
Businesses have the possibility today to provide a destination document instead of a transport document. It is an actual simplification which will greatly facilitate the life of companies.
But watch out for the backlash. The seller must obviously do everything reasonable within his power to have the certainty not to be involved in a tax fraud, with regards to the intra-Community supplies he has performed and which are listed in the destination document. Moreover, the Tax Authorities have the right to demand other documents than those relating to the transport in order to verify if the transaction is genuine and if the returns are consistent with the data collected on the destination document. Therefore, so as to justify the right to apply a VAT exemption to intra-Community supplies, providing the said destination document does not exempt the seller from the obligation to release other information than those relative to the transport (contracts, purchases orders, payment proofs, invoices from transport companies, etc.).
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