What is call-off stock and what are the VAT implications?
Call-off stock (also known as consignment stock) is goods transferred by a supplier to a storage location in another country for a specific known customer. The customer draws down goods as needed. Under EU VAT Directive amendments effective January 2020, a simplified call-off stock arrangement between known VAT-registered parties in different member states allows the supplier to treat the call-down as an intra-community supply at the time the customer takes the goods, rather than treating the initial movement as a self-supply requiring registration.
What conditions apply to the EU call-off stock simplification?
EU call-off stock simplification conditions: (1) Supplier is registered in the dispatch member state but not in the destination; (2) Buyer is VAT-registered in the destination state; (3) Buyer is identified before the goods move; (4) Goods are dispatched to storage facility in the destination state accessible only by the identified buyer; (5) The supplier registers the movement in a call-off stock register; (6) The call-down must occur within 12 months of dispatch.
Frequently Asked Questions
- What happens if call-off stock is not called down within 12 months?
- If the specific buyer does not call down the goods within 12 months, the simplification ceases to apply from the date the goods were moved. The supplier must account for a deemed intra-community supply at the end of the 12-month period. The supplier must retrospectively register in the destination country for the deemed supply. Member states have different approaches to the consequences; the supplier should consult local tax advice if approaching the 12-month limit.
- How is call-off stock different from regular consignment stock?
- The EU simplification specifically requires the buyer to be identified before the goods move. Regular consignment stock where the buyer is not pre-identified (i.e., goods stocked for general sale to multiple customers) does not qualify for the simplification. Regular consignment stock movement to another member state is treated as a self-supply requiring the supplier to register for VAT in the destination country.