With the arrival of the “Quick Fix” for call-off stock as of January 1, 2020, the current Dutch regulation for consignment stock and call-off stock will be withdrawn.
Withdrawal of the current regulation
Since December 30, 1993, there has been a special arrangement in the Netherlands for consignment- and call-off stock. This arrangement was created in order to promote trade between EU Member States and to reduce the administrative burden. Like the Netherlands, a number of other EU Member States have their own regulations for such transactions. However, these regulations are not harmonized. As a result, different conditions apply per Member State or there is no regulation at all.
The European Commission has decided to introduce a harmonized regulation for stocks on demand in all EU Member States. This regulation will be introduced with the 'Quick Fixes' and will apply as of January 1, 2020. In order to meet the European Commission's harmonization objective, the Netherlands will repeal the current regulation for consignment- and call-off stock as of January 1, 2020.
Quick Fix for call-off stock
Based on the Quick Fix for call-off stock, as of January 1, 2020 the transfer of stock from one EU Member State to another EU Member State is in principle not considered as a fictitious intra-Community transaction. If and when the customer removes the goods from stock, the supplier carries out an intra-Community supply of goods in the EU Member State from which the call-off stock has been transferred. The purchaser must declare an intra-Community acquisition of the goods in the EU Member State to which the call-off stock has been transferred.
In order to be able to apply this new simplification, a number of specific conditions must be met. For more information, please check our article: Quick Fix 1.
Impact in practice
This change has a number of important points of attention for practice. For example, it is no longer possible to apply the simplification in a situation where stock is deposited with a consignee in the Netherlands and after placing it will be determined who the (final) customer is. As a result, as of January 1, 2020 the holding of consignment stock sent from other EU Member States into the Netherlands will require the consignor to VAT register and to submit VAT returns in the Netherlands.
The arrangement for call-off stock will also be changed to bring it in line with the Quick Fix. In comparison with the current Dutch regulation, additional conditions will apply that both the supplier and the buyer of the goods have to meet.
In order to simplify this for entrepreneurs who already have stock in the Netherlands, the State Secretary of Finance has decided that the current regulation still applies to:
Consignment- and call-off stock if these are already placed in the Netherlands on December31, 2019; or
If the transport or dispatch to the Netherlands has already started before January 1, 2020.
The current Dutch scheme will continue to apply to these stocks in the Netherlands until 31 December 2020.
What should you do?
We advise companies with consignment- and/or call-off stock in the Netherlands to carefully examine which stock is subject to which arrangement and to record this in a correct manner. This to prevent a possible VAT registration and VAT compliance obligation in the Netherlands.
Do you have any questions about the above? Please contact us.
This content was published more than six months ago. Because legislation and regulation is constantly evolving, we recommend that you contact your Baker Tilly consultant to find out whether this information is still current and has consequences (or offers opportunities) for your situation. Your consultant will be happy to discuss the latest state of affairs with you.
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