The call-off stock arrangement is a mechanism established in order to allow supplier of goods to avoid VAT registration in Member State of destination. It is a simplification that allows supplier to keep the goods within the scope of VAT of the country of establishment of supplier.
How does that work?
We refer to call-off stock arrangement when:
- Goods are dispatched from one Member State of the EU to another, where they are stored.
- Goods are received by the purchaser at the later date than the arrival in the Member State. Reception of goods refers to the transfer of the ownership taking place upon retrieval of the goods from the warehouse.
There are certain conditions that must be kept in order to recognize such transaction as call-off stock arrangement:
- Dispatch of goods is done under a pre-existing agreement between supplier and intended purchaser by or on behalf of the supplier.
- Identity and VAT number of the purchaser is known to the supplier at the time of dispatch
- Place of storage of the goods in another Member State is not recognized as an established business or fixed establishment of the supplier, it can be owned and run by the third party. In case of warehouse being owned and run by the supplier, such operation is referred to as consignment stock and remains subject to different rules. It is important that goods leave the control of the supplier and are intended for identified purchaser in order for them to be recognized as the call-off stock.
- Signed agreement states that transfer of ownership of the goods occurs at the date later than their arrival within the Member State of destination, however it must happen within 12 months from arrival.
- Supplier has not established his business and does not possess a fixed establishment in the Member State of destination. Not fulfilling this condition makes supplier ineligible for this mechanism regardless of whether said establishment intervenes with the transaction
- Supplier can be registered for VAT in the Member State of destination and still make use of this mechanism.
- Records in relation to all transactions towards which simplification mechanism applies are kept by the supplier.
Please keep in mind, that if all conditions are fulfilled call-off stock arrangement must be applied.
As a result of applying call-off stock arrangement:
- For supplier – it will be deemed as intra-Community supply of goods in the Member State of origin at the time of transfer of ownership and
- For purchaser – it will be deemed as intra-Community acquisition of goods in the Member State of destination at the time of transfer of ownership
provided that the transfer takes place within 12 months from the date of entering the goods into the warehouse under the call-off stock warehouse procedure.
This simplification mechanism is definitely a convenient tool, however it does come with obligation to keep records in relation to its application.
- Records to be kept by supplier
- Record of the dispatch of the goods from the Member State of origin
- VAT identification number issued by the Member State of destination of the purchaser and taxable person substituting for the intended purchaser, if applicable
- VAT identification number of the warehouse keeper, address of the warehouse and date of arrival of the goods
- Records of reception of goods at the warehouse – taxable amount, quantity and description of the goods at the time of arrival
- Records: taxable amount, quantity and description of goods, at the time of transfer of ownership, date of transfer of ownership along with VAT identification number of the purchaser
- If purchaser changed, information about that occurrence along with new purchaser information
- If transfer of ownership did not occur and goods returned to the Member State of origin, record of goods – taxable amount, quantity and description along with date of return of the goods
- If simplification mechanism ceased to apply, record of goods involved along with identification of condition that ceased to be met and date upon which it occurred
- Records to be kept by purchaser
- VAT identification number of the supplier, with whom transaction towards which call-off stock mechanism is applied
- Record of goods – description and quantity purchased according to the agreement
- Date of arrival at the warehouse
- Record of taxable amount, quantity and description of the goods along with the date of retrieving goods from the warehouse for the purpose of intra-Community acquisition
- If applicable, record of goods and date of removal of goods from the warehouse by the supplier for the purpose of return to the Member State of origin
- If applicable, record of goods and date of occurrence in case of destruction, loss or theft. In case of uncertainties, date of discovery is also acceptable.
The taxpayer who runs the warehouse to which the goods are entered in the call-off stock warehouse procedure, within 14 days from the date of the first entry of the goods into the warehouse under this procedure, submits, in accordance with the template of an electronic document within the meaning of the Act on of February 17, 2005 on the computerization of the activities of entities performing public tasks (Journal of Laws of 2021, item 2070), by means of electronic communication, notification on running a warehouse used in the call-off stock procedure.
The obligations do not apply only to supplier and purchaser, if the warehouse keeper is a third party, he is also subject to certain obligations including keeping appropriate registers and records.
Obligations of the warehouse keeper have to be completed, if party in question also shares a different role in transaction it means it has to fulfil obligation of both roles. Although application of the call-off stock depends on the suppliers fulfilling formal requirements, purchaser and warehouse keeper can be subject to fees for failing to uphold their obligations in relation to the simplification mechanism.
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