Changes in the VAT Directive – as of 1 January 2020 new rules on settlement of international commodity transactions will come into force


The European Commission has adopted a package of amendments to the VAT Directive (the so-called "quick fixes"), which will affect taxpayers trading in goods within the EU.

As of January 1, 2020, there will be new rules of taxation of chain transactions, documenting of intra-Community supplies and settlement of transactions within the call-off stock.

Detailed information:

According to Council Directive 2018/1910 of 4 December 2018 and the respective Implementing Regulation, Member States, including Poland, are obliged to introduce changes in the following areas:

Changes in the taxation of chain transactions

  • There will be significant changes for taxpayers involved in chain transactions. The aim of the amendments is to simplify the rules for the taxation of these transactions between EU companies by introducing new assumptions regarding the determination of the transaction to which a transport should be allocated.
  • The amended VAT Directive introduces the principle that transport should be allocated only to the supply made to an intermediary.
  • Also, a definition of the intermediary will be introduced. However, the definition set by the new rules is so general that in the case where more than 3 entities would be involved in a transaction, the provisions do not help in any way to determine which of the "intermediaries" is the one to whom the transport should be allocated.
  • Hence, in practice, these changes may not bring any major simplification at all; where more entities are involved in transactions – which is common for this type of transactions – It is likely that the delivery conditions will still have to be examined and the principles developed by the CJEU determining to which transaction transport should be allocated probably would also be in use.
  • By way of exception to the above general rule, the transport may be allocated to a supply made by an intermediary when he has provided his supplier with a VAT number given by the Member State from which the goods are dispatched or transported.
Co to oznacza?

What does it mean?

Such generally stated provisions give Member States with relatively large implementation freedom – actual consequences will depend on wording of the introduced domestic provisions. Regardless of the changes introduced, taxpayers should carry out a review of their transactions and consider redefining their tax treatment. This also requires considering the expectations of business partners and legal regimes implemented by the countries where they are located. Freedom of implementation will also result in the need for even greater attention to be paid to the regulations that are in use in other countries with respect to the consistency of treatment of transactions and the principles of their taxation.

New conditions for applying 0% VAT rate to ICS

Additional obligations will be imposed on taxpayers performing ICSs - among others, the rules concerning documentation confirming the delivery of goods. For example, the vendor will be obliged to possess two items of non-contradictory evidence confirming the dispatch or transport which were issued by two different parties that are independent of each other. Moreover, the vendor will be required, in certain cases, to obtain a written statement from the acquirer confirming that the goods have been dispatched by the 10th day of the month following the month of delivery.

What does it mean?

It is important to prepare for new – more restrictive – rules for documenting ICS transactions. Taxpayers should review the existing process of collecting confirmations and examine whether the documents will meet the new requirements. This process, as it will require cooperation with business partners – and possible changes of the arrangements, should start as early as possible and ensure that the acquirer provides a timely statement on the dispatch of the goods from the country.


Co to oznacza?

Call-off stock

Currently there are different rules in the Member States for the application of the call-off stock simplification. The changes will unify the applied regulations – from 2020 in each Member State there will be a possibility to apply the simplification for this type of transaction, similar to the mechanism that are currently in use in Poland and – after meeting certain conditions – recognizing the delivery only at the moment of collecting goods from the stock by the purchaser located in the other Member State.

Co to oznacza?

What does it mean?

The result of these changes would be the extension of the application of the mechanism to other Member States in which such simplifications have not yet been implemented, and the harmonization of the application of the rules throughout the European Union.



Regardless of the shape of the solutions adopted by the Polish legislator, taxpayers must be ready for the upcoming changes. By the time the amending law comes into force (January 2020), the first step should be to review the existing rules, in particular the way of documenting intra-community transactions and the adopted rules for taxation of chain transactions. This will help to gain the time needed to prepare business to the new regulations and obligations, as well as to establish consistent tax rules with foreign business partners. A review of call-off stock simplifications currently used in different Member States should also be performed, as the changes may challenge the purpose of using such schemes.

As some of the changes result from the Implementing Regulation, which Member States are obliged to apply directly, it is already possible to determine precisely what obligations will await taxpayers from 1 January 2020 (in particular – the new rules of documentation of the ICSs transactions). As per other changes, the analysis of the VAT Directive provisions allows to predict the possible shape of the changes, but a lot will depend on the domestic legislators. Even assuming that the draft of the Polish amending act will be published in the first half of 2019, these changes may be so far-reaching that there may not be much time left for their implementation.

Skontaktuj się z nami

Tomasz  Kassel

Tomasz Kassel

Managing Partner, Tax, Legal & People, PwC Polska

Tel.: +48 502 184 846

Tomasz Pabiański

Tomasz Pabiański

Partner, PwC Polska

Tel.: +48 502 184 952

Joanna Poznańska

Joanna Poznańska

Senior Manager, PwC Polska

Tel.: +48 519 504 240

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