The transposition of the so-called "Quick Fixes" into Spanish law comes into effect. These changes affect the tax treatment of intra-Community supplies of goods.
In an effort to prevent fraud in intra-community transactions and to simplify the administrative procedures required in some countries of the Union, new measures or rules were created, established in Council Directive (EU) 2018/1910 of 4 December 2018, Council Directive (EU) 2019/475 of 18 February 2019, and Council Implementing Regulation (EU) 2018/1912 of 4 December 2018, known as Quick Fixes.
This February, through Royal Decree-Law 3/2020, which introduces certain modifications to Law 37/1992, of December 28, on Value Added Tax (LIVA) and to Royal Decree 1624/1992, of December 29, which approves the Regulations of Value Added Tax (RIVA), the various directives of the European Union are incorporated into the Spanish legal system.
The measures relate to 4 basic points in intra-community trade:
1. Consignment sales agreements
are defined as those in which the supplier maintains stock in the client's country so that the client can access the goods according to their needs, thus ensuring agile and efficient supply.
Until now, the supplier had to transfer the goods to the country where the client held the stock on consignment. This required the supplier to be registered in the destination country and to declare an intra-Community supply of goods in the country of departure and a transaction treated as an intra-Community acquisition of goods in the country of arrival. Subsequently, when the client accessed the goods, they had to declare a domestic sale, with reverse charge applicable since it was a domestic transaction between a non-resident supplier and a resident client.
From March 1st, it is established that deliveries of goods made within the framework of a consignment sales agreement will result in a single transaction: an exempt intra-Community supply of goods in the Member State of departure and an intra-Community acquisition of goods in the Member State of arrival, which takes place when the customer removes the goods from the consignment or warehouse.
The conditions for applying this simplified system are as follows:
• The seller cannot have their registered office or a permanent establishment in the Member State of arrival
. • The business receiving the goods must have a VAT identification number in the Member State of arrival
. • The seller must be aware of the purchaser's identification details (company name and VAT identification number) before the start of transport.
• The seller must record the shipment of the goods in their Register of Certain Intra-Community Transactions and on the corresponding Form 349.
• Within 12 months of shipment, the goods must be purchased by the business specified in the consignment sales agreement or by a substitute business (also holding a VAT identification number in the Member State of arrival), and the seller must record this change in the Register of Certain Intra-Community Transactions and on Form 349; or the goods must be returned, in which case these returns must be declared in the Register of Certain Intra-Community Transactions.
A transfer of assets will be deemed to have taken place if any of the following situations occur within a period of twelve months:
• The goods were not purchased by the client business and have not been returned.
• The goods were transported to a destination other than the State specified in the consignment sales agreement.
• The goods were lost, destroyed, or stolen.
2. Intra-Community chain sales
They are defined as those sales in which there are successive deliveries with a single transport of the goods from one EU country to another from the first supplier to the final purchaser in the chain.
To date, intra-community supplies are considered exempt when they are linked to the transport of goods, but this has generated many interpretative disparities that complicate their declaration.
From March 1st, when the intermediary handles the transport and provides the initial supplier with a VAT number from a country other than the country of origin of the goods, the delivery between them will be considered an intra-Community supply of goods.
Conversely, if the intermediary provides the supplier with a VAT number from the same country of origin of the goods, this delivery will be considered a domestic transaction in the country of origin, and the delivery made by the intermediary to their client will be considered an intra-Community supply.
3. The conditions for applying the exemption to intra-Community supplies of goods.
Until now, the requirement was that the goods be transported outside the Member State of origin to another EU country, in addition to a VAT number issued by another Member State—a formal requirement.
From March 1st, these requirements remain in place, although the VAT number is now a predetermined substantive requirement, and another substantive requirement for the exemption is added: the supplier must have declared the transaction in the corresponding recapitulative statement of intra-Community transactions.
4. Accreditation of transport in intra-community supplies of goods.
A presumption is established that transport has taken place when the seller has at least two non-contradictory pieces of evidence, issued by different and independent parties:
• Signed CMR letter or document
• Bill of lading
• Air freight invoice
• Carrier's invoice
Or if you have one of the non-contradictory pieces of evidence and at least one of the following pieces of evidence:
• Transport insurance policy or bank document proving its payment
• Official document proving the arrival of the goods in the Member State of destination issued by a public authority
• Receipt issued by a depositary in the Member State of destination confirming the storage in that Member State.
When the transport is carried out by the buyer, he must send the seller a specific declaration certifying that the goods have been transported by him or by a third party on his behalf and that he is in possession of the evidence set out above so that the exemption can be applied.
If you require our assistance to obtain more information or have any questions, please contact us via email at ambit@ambitassessor.com or at our offices.
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A graduate in Business Administration from the University of Barcelona, she has furthered her training in tax and accounting by attending courses and seminars offered by the EAE Business School, the College of Economists, the Bar Association, and the Terrassa Chamber of Commerce.
She combined her studies with work in the family business and as a substitute in the production audit department of Bimbo SA.
She has spent her professional career at Àmbit Assessor, where she joined in 1991 to support the accounting and tax department, becoming a consultant a few years later.
Since 2000, she has been the managing partner of the company.
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