Clarifications were issued on the VAT regime applicable to intra-Community supplies of goods and consignment sales

Portugal - 06 / 02 / 2020

Tax Alert Portugal

Following the implementation in 2016 of the VAT action plan within the European Union, the European Council proposed the European Commission to approve some measures to improve and combat VAT fraud, in particular with regard to intra-Community supplies of goods.

If, on one hand, it was sought to ensure that the parties involved (suppliers, buyers and transporters) had the necessary evidence to support the application of the VAT exemption in the Member State of origin of the goods in the corresponding intra-Community supply, it was also intended, on the other hand, to prevent the VAT taxpayer, who transfers the goods from one Member State to another for consignment sales, from apply for a VAT registration in the Member State of destination of those goods.

These measures (so-called “quick fixes”) were established by the Council Directive (EU) 2018/1910 of 4 December 2018, whose Member States were supposed to transpose by 31 December 2019.

On the same date, it was adopted the Council Implementing Regulation (EU) 2018/1912 of 4 December 2018, that amended the Council Implementing Regulation (EU) 282/2011 of 15 March 2011, which implemented control measures to the application of the rules approved by the abovementioned Directive. These measures entered into force on 1 January 2020 and are directly applicable in Portugal.

Given that the Portuguese State has not transposed this Directive yet, being, at the present date, only disclosed the corresponding Bill whose approval is only expected to occur after the approval of the State Budget Law for 2020, the Portuguese Tax Authorities have issued some clarifications regarding the application of said Regulation through the Circular Letter no. 30218/2020, of 3 February and the note available on the corresponding website.

These measures are essentially the following and should be adopted as from 1 January 2020:

Determination of the necessary evidence to prove the transport of the goods under intra-Community supplies for the purpose of applying the exemption provided in article 14 of the Portuguese Intra-community Transactions Regime;
Adoption of an internal register, both by taxpayers who transfer the goods, and by those to whom they are delivered, for the purposes of applying the simplified regime of consignment sales.

This measure will also imply the amendment of the recapitulative statement to include the reporting of these operations. Since the new declaration is not approved yet, the Portuguese Tax Authorities determined that the statement still in force must be submitted and, if there are any consignment sales to report, they still must be referred therein in Table 04 (as intra-Community supplies of goods), as well as in field 7 of Table 06 of the VAT periodic return of the VAT period to which they refer to.