The recently enacted law 4714 (Government Gazette A '148 / 31-07-2020) establishes substantial legislative amendments and clarifications with respect to VAT exemptions in intra-Community transactions, including the inventory’ s maintenance in other EU Member States. In particular, and given the fact that the expected Ministry of Finance’s circular will not define anything different, the Law’s main objectives cover the following areas:
With the provisions of article 61 of Law 4714 / 31.7.2020, a new article (7A) is added to the VAT Code (Law 2859/2000), which introduces an important provision of article 1 of EU Directive 2018/1910 (known also as “Temporary Solutions”). Based on this, the transfer and creation of inventory in another EU Member State is simplified for Greek companies, relieving them from the obligation to obtain VAT/Tax Registration Number in a Member State as well as from any other submission obligations. The same regime applies correspondingly to EU companies that plan to maintain their inventory in Greece.
The basic prerequisites for the implementation of the above simplified regime is:
• The inventory to be sent to a specific acquirer upon agreement
• The acquirer already has VAT/Tax Registration Number in the Member State to which the inventory is transferred
• Inventory must be sold within 12 months of arrival.
As the inventory’s ownership is not transferable during the transport of goods, except in case of their sale. Basically, the acquirer will keep the inventory until the necessary customer is found and decides to sell all or part of it.
With the simplification introduced with retroactive effect from 1.1.2020, in case of transfer of goods to another Member State in order to create inventory for a specific acquirer, the transfer is not treated as an intra-Community transaction in either of the two trading Member States. The aforementioned transactions will be classified as intra-Community when the stock is eventually sold by the acquirer to a third party.
To ensure an adequate level of oversight by the tax authorities on both sides, both the supplier and the acquirer should:
- Maintain a special inventory book for goods held in the EU Member State of arrival.
- The owner of the goods should mention the acquirers VAT/Tax Registration Number in the summary table of intracommunity transactions and vice versa.
- Submission of a summary table of intracommunity transactions of the final delivery / acquisition of the goods.
In case the goods are not sold within 12 months from their arrival, then from the next day beyond 12 months, the transaction is characterized as intra-community. Therefore, in order for the business to be lawful under the provisions of VAT, the sender must receive VAT/Tax Registration Number in the Member State of dispatch of the goods. The above obligation will not apply if the goods are returned to the Member State from which they were sent.
It is pointed out that the regulation, which creates increased monitoring obligations, is a choice and not an obligation for companies.
The new provisions set out in paragraph 6a of Article 13 of the VAT Code and having retroactive effect from 1.1.2020 clarify the case of successive delivery of the same goods, which are sent or transferred from one Member State to another Member State, directly from the first supplier to the last consignee of the chain, the shipment or transfer is attributed only to the delivery to the intermediary operator.
By way of derogation from the previous paragraph, if the intermediary operator notifies its supplier of the VAT registration number received from the Member State from which the goods are dispatched or transported, the consignment or transport is attributed only to the delivery of the goods by the intermediary operator.
For the purposes of this provision, "intermediary operator" means a supplier other than the first supplier in the chain, who sends or transports the goods either himself or through a third party acting on his behalf.
It is pointed out that based on the above, companies should review the correct application of VAT rules in triangular and chain transactions.
III.Place of taxation of intra-community acquisition of goods
In Article 15 of the VAT Code the introduced changes affect the conditions that must be met for the implementation of the simplified triangular trading regime with contracting parties, whether they carry a VAT/Tax Registration Number or maintain facilities in three different EU Member States.
Particularly, with the change of par. 2 of article 15 of the VAT Code, the intermediate buyer has the possibility to be taxed in Greece for intra-community acquisition, without the need for an establishment in the country, provided he maintains a Greek VAT number and provided that the non-transport of goods within the country, as they constitute an intra-Community acquisition in another EU Member State where they were transferred.
In addition, in order to implement the simplification of the triangular transactions for which the country of arrival is Greece, the intermediary trader does not have to be established for VAT purposes in Greece, while the previous provision stipulated that it was not necessary to have VAT/Tax Registration Number in Greece.
IV.Transactions between related parties
Through the amendment in case d 'paragraph 2 of article 19 of the VAT Code, the taxable value for VAT purposes is considered the fair value of the acquisition of goods or services for transactions between related parties (eg family members, persons influencing the management or property, etc.), as defined in the Income Tax Code (Law 4172/2013).
The transactions that fall under this new provision are the following:
- The transaction’s value is less than the fair value and the recipient of the goods or services is not entitled to a full rebate,
- The transaction’s value is less than the fair value and the supplier of the goods or the provider of the service is not fully entitled to a deduction while the taxable transaction is exempt from tax within the country according to cases a) to k), la) and ld) of par. 1 of article 22 and without the right of deduction in accordance with article 30,
- The transaction’s value is higher than the normal value and the supplier of the goods or the service provider is not fully entitled to a discount.
V.Mandatory requirements for granting the exemption of intra-community deliveries
The amendments introduced in Article 28 of the VAT Code on the exemption of intra-Community supply of goods to another Member State introduce the following mandatory requirements retroactively from 1.1.2020:
• Customer’s VAT/Tax Registration Number notification of the Member State of arrival to the supplier
• Submission of a summary table of intra-Community deliveries by the supplier
• Ensuring valid summary table information
VI.Additional goods and services subject to the reduced VAT rates
The following new cases are now added to Annex III of the VAT Code, which lists goods and services subject to reduced VAT rates:
• Sports tickets that will be subject to 13% for the period from 1.9.2020 to 30.6.2021.
• The music books of Tarif Code 4904 which are subject to the reduced VAT rate of 6%.