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The German Federal Ministry of Finance announced a decree regarding the VAT treatment of call-off stocks in Germany on 10 October 2017.
A “call off stock” situation occurs when products owned by a non-resident supplier are dispatched to be stored in the customer’s nation, typically at the customer’s facilities. When products are required, the consumer withdraws them from stock. Only at that point does the customer acquire legal ownership of the products from the foreign provider.
Before 2020, the call-off stock simplification would apply in Germany if a purchase contract was in effect at the time of shipment and numerous other conditions were met. These restrictions included identifying the German customer prior to shipping products into Germany and paying for the goods or having a binding order between the customer and the foreign supplier. The client also needed unfettered access to the goods.
This means that the foreign business does not need to register for German VAT, and the transaction is treated as a “direct” intra-Community supply of goods from the foreign business to the German client, which results in significant reductions in compliance costs and administrative burdens for the client while also providing significant cash-flow benefits for the foreign business.
Last Updated: 16/01/2022
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