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Movement of goods – Clarification of the term ‘consignment warehouse’

The Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) published an introductory guideline on the consignment warehouse regulation under the VAT Act (Umsatzsteuergesetz, UStG). The VAT application decree was amended in this regard.

The consignment warehouse regulation is a provision to simplify deliveries to warehouses for call-off purposes in the territory of the Community. This was introduced on 12.12.2019 together with the ‘Act to promote further tax incentives for electromobility and to amend other tax regulations’.

Since 1.1.2020, in the case of consignment warehouses, if certain conditions are met, it has to be assumed that a direct intra-Community supply by the foreign company occurs and that this is followed by an intra-Community purchase by the customer. The conditions of the consignment warehouse regulation were laid down in Section 6b UStG. The starting point is that an item from one EU Member State is transported to another EU Member State. This takes place for the purpose of selling the item only in the Member State of arrival.

Then the BMF, in its circular from 12.12.2021 (reference: III C 3 – S 7146/20/10001 :005) expressed its opinion on conditions listed in Section 6b UStG. According to this, a warehouse can be, for example, a consignment warehouse or a distribution depot. However, it does not necessarily have to be a warehouse in terms of a building. Furthermore, the item has to remain in the country of destination from the date on which it is placed in storage until it is removed by the purchaser. Transferring the item to another warehouse would not be harmful from a VAT point of view. Although, a warehouse owned or rented by the supplier and operated by using its own resources would be harmful. By contrast, merely being registered in the Member State of destination would not be harmful. If a different VAT identification number is used then the application of the consignment warehouse regulation would however be excluded.

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