Each time a trader moves his goods across EU borders, he should check whether there are VAT implications. Many situations do not lead to additional VAT obligations, but some do, particularly in the event of unforeseen circumstances. In this article we explain this in more detail.

EU deliveries

VAT taxes the supply of goods. If goods are transported from one Member State to another as part of a supply, this qualifies as an EU supply. Under certain conditions, the supplier may apply the VAT zero rate in the country of departure. The purchaser of the goods picks up the thread of the VAT narrative in his own country. He reports the purchase in his local VAT return (EU purchase) and owes VAT at the local rate (which is then usually deductible).

Transfers of own goods

But goods can also leave for another Member State without transfer of ownership being the basis for it. Examples are:

  • the plumber in the border region, who loads up his van with tools to seal a pipe in Belgium;
  • the manufacturer, who sends equipment to Finland so that it can be repaired there; or
  • the artist who takes paintings to Germany, to be exhibited in an exhibition space there.



If an entrepreneur brings goods across a border for business purposes, without a supply being the basis for this, we speak of a transfer of own goods or fictitious supply. Under Dutch law (in accordance with the European VAT Directive), the transfer of own goods is equated with a “real” EU supply. In principle, this has the following consequences:

  • The entrepreneur must treat the shipment as an EU supply, i.e., he must be able to demonstrate the VAT zero rate and he must include the shipment in his VAT return and EC Sales List; and
  • The entrepreneur must register for VAT in the country of arrival of the goods, where he must account for a corresponding EU purchase (more or less to himself) in a VAT return.



Two observations that can have quite an impact! Fortunately, there might be some mitigating circumstances.

Excluded transfers of own goods

In order to prevent every cross-border movement by an entrepreneur from resulting in VAT registrations and administrative burdens, a number of common movements are exempted from the concept of transfer of own goods. These are goods that cross an EU border to:

  • to be assembled or installed in the country of arrival, at which time a transfer of ownership to the customer takes place;
  • be supplied as distance sales (to individuals and comparable persons in another Member State);
  • to be delivered on board a ship, aircraft or train;
  • be supplied at the VAT zero rate;
  • to be used in a service provided to the entrepreneur, consisting of expert examinations or works on the good, provided that the good is then returned to the entrepreneur in the Member State of departure;
  • temporarily used in the Member State of arrival for the purpose of a service provided by the entrepreneur; or
  • to be used for a period of up to 24 months in the Member State of arrival, if the import of that good would be exempt from import duties under the temporary importation regime (for example, in the case of goods for sports purposes or exhibitions).



We will not discuss the special arrangement for natural gas in more detail in the context of this contribution.

Thanks to the exceptions, the manufacturer, plumber and fabricator seem to be able to breathe a sigh of relief. However, they must still meet a number of administrative requirements.

Administrative conditions

First of all, movements of goods covered by the excepted shipments must be recorded in a register. This register must be kept with the records, but is in itself formless. Simply recording them in a file is sufficient.

In addition, the exempted transfer of goods may lead to challenges at a later date. It is possible that at some point the goods will no longer meet the conditions set. In that case, the goods will still be deemed to have been transferred, so that at that time an EU delivery and EU purchase must still be declared! This will occur for example if:

  • the plumber, after his appointment, decides on a whim to sell his van to a Belgian garage;
  • the Finnish repairers have to send the device on to their Swedish colleagues to finish the repair (the goods do not yet go back to the Netherlands); and
  • the artist delivers a painting from the exhibition space.



Finally, in the Netherlands no (pro forma) invoice needs to be drawn up for a shipment. This may be different in other Member States.

In a number of cases, it is still possible to prevent an imminent transfer of own goods. This can prevent many administrative obligations.
Please feel free to contact Joyce Westerveld – RED Tax Specialists so we can explore the possibilities together.