Comments on the current letter of the Federal Ministry of Finance on intra-Community supplies – Part 6
In this multi-part series of articles, we would like to present how the tax authorities comment on the changes from 01.01.2020 in the context of the so-called “quick fixes”. The principles apply to all deliveries made after 31.12.2019.
We hope you enjoy reading!
BMF letter dated October 9, 2020, III C 3 – S 7140/19/10002
The BMF letter can be found at:
Simple and qualified confirmation of the BZSt (Part II)
The confirmation procedure at the Federal Central Tax Office enables German entrepreneurs to check the VAT ID number, whether at the time of delivery to the EU, it is valid.
The entrepreneurial status of the recipient of the service must be proven in order to be able to treat the supply as VAT-exempt.
A simple confirmation will provide you with information as to whether a foreign VAT number is valid in the Member State that issued it at the time of the request.
A simple confirmation must be executed before a qualified confirmation.
With a qualified confirmation, the entrepreneur can also query whether the communicated information on company name (including legal form), company location, postal code and street corresponds to the data registered in the entrepreneur file of the respective EU member state. Only this valid, qualified query provides sufficient protection for proof of tax exemption.
In addition to the online confirmation inquiry option, one may also submit the simple and qualified inquiry to the BZSt by mail, telephone, fax, or e-mail.
The entrepreneur is strongly advised to document the query results. Usually this is done by a written qualified confirmation from the BZSt. We present alternatives to individual queries via the Internet form in the following article.
In the BMF letter cited above, the tax authorities have not provided any guidance on the practical implementation of the queries.
Intra-Community supply expressly requires (since January 1, 2020) that the VAT number used by the recipient of the service has been issued to him and is valid at the time of supply. This must be regularly proven by the qualified confirmation at the BZSt.
But what if an entrepreneur regularly delivers to the same customer, possibly even for many years? Here the question arises whether a qualified query must be made each time. In principle, this can actually not correspond to the purpose of the regulation.
For new customers or customers who are supplied only infrequently, the entrepreneur has no choice but to query before each delivery. With long-standing inventory customers it can be meaningful in practice however to make qualified confirmation inquiry nevertheless in a certain rhythm and additionally, if unusual business is executed. The intervals at which this should be done certainly depend on the individual case. However, if you want 100% security here as well, you should query and document before each delivery. As said, there are there unfortunately still no simplification regulations.
Look forward to the next article. It will be on the topic of “Alternatives to postal qualified confirmation from BZSt”
The content reproduced is for general information purposes. All contributions are compiled to the best of our knowledge. These are neither intended nor suitable to replace an individual consultation by expert persons, taking into account the specific circumstances of each individual case. No liability can be assumed for their content. Please contact your tax advisor for your individual case.