Storyboard for

1. VAT Consignment stock Storyboard for

2. …clear thinking

3. By completing this module you will be able to: Describe the VAT implications of consignment stock Explain that EU member states have differing rules At the end, you can visit useful Internet sites on a “Web Ride” Lecturer: Tim Buss Learning time: approx. 20 min How to use this learning module? - Click on "Help" in the Table of Contents (TOC) VAT: Consignment stock Graphic: [presenter or standard graphic]

4. Goods regularly dispatched between EU member states Stock held pending orders or draw down by customers VAT treatment varies between EU member states Problems created for businesses European Commission to consider Introduction Graphic: [a Norbert Dentressangle lorry]

5. Movement of goods on consignment involves no immediate change of ownership Always treated as a supply Create a liability to account for VAT in member state where goods held Current law Graphic: [European Courts of Justice]

6. Movement of own goods intra EU: A self supply is created for VAT purposes Sender has to register for VAT in country of destination Sender prepares an internal zero rated invoice Sender accounts for acquisition VAT in country of destination Later supply to third party customers: domestic supply in the county concerned Possible multiple VAT registrations VAT Treatment of consignment stock Graphic: [EU flag]

7. VAT law does not refer to consignments Certain member states distinguish between consignment and call-off stock Other member states do not recognise a distinction Consignment vs. call-off Graphic: [a shipping container]

8. Consignment stock is “stock where at the time of transportation from one member state to another a buyer has not been identified” Moving stock closer to the market Stock readily available for customers following orders Consignment stock: definition Graphic: [a dictionary]

9. Buyer(s) identified at the time of transportation from one member state to another Call-off stock moved closer to identified buyers, so buyers can call for it instantly when required Call-off stock: definition Graphic: [a UPS van]

10. Self supply created for VAT purposes Sender has to register in the country of destination Sender does not account for VAT in the member state of dispatch of consignment stock Sender accounts for acquisition VAT in member state of destination Domestic supply in the member state concerned: supplier charges local VAT Consignment stock: VAT treatment Graphic: [German flag]

11. Where a distinction is recognised: Call-off stock treated as supplied to identified customer(s) at the time of transportation from original member state Supplier issues a zero rate invoice to customer showing customer’s VAT number Customer accounts for acquisition VAT in country of destination Broadly the same as a normal intra EU supply Call-off stock: VAT treatment distinction Graphic: [large „0%“ ]

12. Suppliers have to register in member state where stock held Problems where call-off stock returned to supplier or diverted to other countries Uncertainty created Consequences where distinction not recognised Graphic: [big question mark]

13. Bulgaria Denmark Estonia Germany Greece Malta Portugal Spain Sweden EU member states not making distinction Graphic: [Denmark flag]

14. Particular rules apply in certain member states even where distinction between consignment and call-off recognised France and Italy: time limits of 3 months and a year respectively Belgium: book keeping entries required by customer France, Finland, Hungary, Ireland, Italy, Netherlands and Slovenia: ignore reporting requirements for call-off stock Differing treatments Graphic: [Belgium flag]

15. European Commission is considering whether differing rules hinder activity Certain member states treat call-off stock as consignment stock Pattern of activity varies for commercial reasons Differing local rules even where distinction between consignment and call-off recognised Local advice should be sought before shipping goods Conclusion Graphic: [standard summary graphic]

16. The key things to remember from this module are: The VAT accounting and reporting rules in different member states vary widely Distinction between consignment stock and call-off stock Need to consider the rules in the member states where goods are stored Summary Graphic: [standard summary graphic]

17. Web Ride

18. …clear thinking

19. Please select the correct answer(s) and then click on “Submit” What is the difference between consignment and call-off stock? No difference in certain member states Consignment stock is held by supplier, call-off stock is delivered direct to customer Call-off stock is held for particular identified customers Call-off stock involves a legal change of ownership when transported from supplier’s member state to customer’s member state. Question 1

20. Please select the correct answer(s) and then click on “Submit” Where a business sends goods on consignment to another member state, which of the following is a legal responsibility? The sender must account for VAT in country of dispatch The sender must treat the dispatch of goods as a supply The sender must register for VAT in the country of destination of the goods The sender must account for acquisition VAT in the country of destination of the goods Question 2

21. Please select the correct answer(s) and then click on “Submit” Where a distinction between call-off and consignment stock is recognised, when is call-off stock treated as having been supplied? When it is called off by customer When it is ordered by customer When it is transported from original member state When it is put into in stock in customers member state Question 3

22. Now you have finished this module and acquired basic knowledge on VAT and consignment stock If you answered all the questions in the Quiz correctly, you can print out your personal certificate by clicking on the link Thank you for your attention! Finish Graphic: [standard finish graphic]