VAT: Stricter Rules for Pickup Transactions

Increased exposure

Pickup transactions (ex works supplies) are sales transactions whereby the customer takes care of the collection and transportation of the goods to another EU country. A 0% VAT rate may apply, but only if proof exists of cross border transport. Under the current rules, this proof can consist of a takeaway statement, completed and signed by the person collecting the goods and stating that the goods will indeed go to another EU country. A completed and signed statement supports the use of the 0% VAT rate.

However, as of April this year, a takeaway statement can only be used if the customer itself or one of its employees collects the goods. If a customer uses a carrier or other third party to pick up the goods, this customer must share the relevant transport documentation with its supplier. The supplier needs this documentation as proof of cross-border transport, as a takeaway statement is no longer accepted. Without such transport documentation, a supplier can no longer apply the 0% VAT rate.

What to do?

Businesses with EU transactions should check whether the above has impact on their current use of the 0% VAT rate. Ex works supplies require special attention.