By ruling no. 574 of 25 November 2022, the Revenue Agency clarified that, in case of ‘call-off stock' arrangements, the VAT regime arising therefrom shall continue to apply if, within twelve months from the arrival of the goods in the territory of the other Member State, the recipient of goods is replaced by another VAT taxable person, provided that the conditions set forth by the legislation are met and the supplier indicates the replacement in an appropriate register.
According to article 17-bis (5) of Directive 2006/112/EC, the compliance administrative burden – connected with VAT obligations arising in the Member State where the warehouse is located – is eliminated (facilitated) in case of call-off stock (or consignment stock) arrangements provided that the transfer of storage goods occurred between two Member States with the aim of their subsequent supply to a previously identified recipient purchaser.
This facilitation was transposed into national law by Legislative Decree No. 192 of 5 November 2021 into Articles 38-bis and 41-bis into Decree-Law No. 331 of 30 August 1993, which, inter alia, for the purposes of the applicability of the call-off stock VAT regime, require, cumulatively, that:
– the supplier and the customer are VAT taxable persons (subjective requirement);
– the identity of the customer, identified for VAT purposes in the Member State of transfer of goods, is previously identified by the supplier from the beginning of the dispatch/transport (objective condition);
– the supplier has neither established its business nor has a permanent establishment in the Member State to which the goods are dispatched or transported (territorial requirement).
Article 50 (5-bis) of Decree-Law No. 331/1993 also requires, in order to prevent fraud and/or abuse, that the movements of goods made in the context of the call-off stock be: a) recorded by the transferor and the recipient in a special register, and b) indicated separately in the declaration of intra-Community supplies and acquisitions, so called ‘Intrastat'.
In this scenario, by Ruling no. 574/2022, the Revenue Agency examined the VAT regime applicable to the call-off stock in the event that the person originally designated as the recipient of the goods is replaced by a different person.
Based on the current legal framework, the Revenue Agency confirmed the applicability of the facilitated VAT regime, provided that the replacement of the original recipient of the goods to the requirements set forth by national law (see above) meets the following additional conditions:
– the replacement takes place before the goods are removed; and
– the transfer of the goods takes place within 12 months of their arrival in the Member State of destination.
These clarifications by the Revenue Agency follow the previous guidance reported in the Explanatory Notes drafted by the services of the European Commission in December 2019 where, in order to ensure transparency and certainty of the transaction, had noted the need: a) that the replacement of the original recipient with the new VAT taxable person should occur before the latter removes the goods; and b) that there should be no interruption between the termination of the call-off stock agreement concluded with the original recipient and the conclusion of a similar agreement with the new one.
The supplier's obligations to compile the register regarding movements, as well as the ‘Intrastat' statements containing the information regarding the recipient purchaser's replacements remain unaffected.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.