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Germany intra-community nil VAT rating

  • Jul 5, 2015 | Richard Asquith

Germany intra-community nil VAT rating

A lower tax court in German has ruled that full accounting and invoice records are not a prerequisite for entitlement to zero nil VAT rating on intra-community supplies.

The case under review concerned a German carpet seller who transferred stocks of carpets from its site in Germany to a warehouse in Netherlands. Under EU VAT Directive, this may be considered an intra-community dispatch from German and arrival in the Netherlands. As it was a self-supply, it was entitled to nil-VAT rating under the simplification rules on EU cross border supplies.

However, the seller did not fully report the movement, nor self-invoice itself as required under most countries’ VAT codes. The German tax authorities contended that this undermined the nil-VAT status, and German VAT at 19% was due.

German intra-community supply ruling

The German tax courts held that the accounting requirements were not a substantial element of the determinants of intra-community supplies, and the supply on an intra-community basis was clearly evident. This was even though the seller had no Dutch VAT number to verify that it was an intra-community supply.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.