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European Commission requests Germany to exchange information regarding so-called “call-off stock arrangements”

The Commission has decided to send a letter of formal notice to Germanyfor not having its IT systems ready for VAT quick fix simplifications that entered into force on 1 January 2020. These quick fixes relate, in particular, to the transportation of goods from one Member State to another (so-called “call-off stock arrangements”). “Call-off stock arrangements” refer to the situation where, at the time of the transport of goods to another Member State, the supplier already knows the identity of the person acquiring the goods, to whom these goods will be supplied at a later stage and when they will arrive in the Member State of destination. The VAT rules have been simplified in order to avoid the situation where the supplier has to register for VAT in another Member State only because of stock that is held there. The simplification of the rules means that Member States can exchange with each other electronic information to avoid fraud. Germany is however not ready to submit such information and will only develop the necessary technical infrastructure by the end of 2021. This will affect the capacity of other Member states to fight fraud and will also hinder the smooth functioning of the Internal Market. Germany is therefore considered to be in breach of the principle of sincere cooperation and fails to fulfil its obligations under the Administrative Cooperation Regulation (Regulation (EU) No 904/2010). If Germany does not act within the next two months, the Commission may send a reasoned opinion to the German authorities.

Source European Commission