Back To Category

Quick Fixes for VAT: 6 months on

Touted as the biggest change to VAT in nearly 25 years, the EU Quick Fixes came into effect on 1 January 2020. Six months on and authorities and businesses are still struggling to adapt to the new rules

Since 1 January 2020, the European VAT legislation has contained four so-called ‘Quick Fixes’. According to the EU Commission, they are intended to simplify cross-border trade within the EU. 

Some countries slow to react

The Quick Fixes entered into effect several months ago. Notwithstanding this, authorities are still struggling to adapt their legal system to the new rules.

Join our conversation on the biggest change to EU’s VAT in nearly 25 years​

An overview published by the EU Commission points out that a number of Member States (including Greece, Italy and Portugal) have not yet adopted any national legislation on the Quick Fixes. To motivate these countries to be compliant with EU law, the Commission has indicated that it will start up infringement procedures against them, bringing their cases before the European Court of Justice.

Businesses struggling too

Whilst various Member States are lagging behind with their implementation, businesses also prove to be struggling. The primary reason is that the new rules require considerable changes to ERP-configurations and business processes (eg invoicing, warehousing, administration). In addition, the incomplete implementation of the Quick Fixes in the EU makes it difficult for businesses to know which rules apply where, and from what moment onwards.

In practice, we have received feedback that some businesses find the Quick Fix on the call-off stock too complicated, as it relies on many strict and formal conditions (eg the 12-month limitation period). Companies also struggle with the Quick Fix on the VAT ID number, as the new rules require significant changes to the administrative processes. This being said, the Quick Fix on the allocation of transport is generally received favourably, as it enables parties operating within a supply chain to determine the correct VAT treatment of their supplies in a simpler manner. As regards the Quick Fix on the proof of transport, some confusion remains; it appears that some countries are inclined to make it mandatory, whereas others use it as an optional measure.

Missed opportunities?

Reviewing the feedback from corporate actors, one may question to what extent the Quick Fixes have indeed led to a simpler intra-Community business environment. This being said, we believe that the Quick Fixes offer various opportunities. Once the new rules are properly in place in all EU countries, they may allow businesses to streamline their logistic flows and reduce their VAT reporting and registration obligations.

For all the latest tax news and developments, download our app: Baker Tilly Mapp: Android | Baker Tilly Mapp: IOS

This article was first published on www.bakertilly.nl on 1 July 2020 and has been republished with the authors’ permission.

Want to know more?

Get in touch with our experts from around the globe
  • By subscribing, you authorise Baker Tilly to store your contact information in keeping with our privacy policy

Related Articles

African free trade area: a game-changer for the continent’s economies? FTA

World’s largest free trade area sets its sights on being operational on 1 January 2021

4-6 minutes

Can incorrectly invoiced VAT be reclaimed if the assessment has already been finalised? Tax

Understand the recent rulings from the EU Court of Justice regarding VAT.

2-4 minutes

US-China tensions add extra layers to manufacturing deals M & A

As the US and China trade conflict rolls on, uncertainty around tariffs and how they impact bottom lines is adding an extra level of complexity to transactions in the manufacturing sector.

2-4 minutes

Meet the experts

Jayant Rakhan

Baker Tilly Netherlands

View Profile

Marisa Hut

Baker Tilly Netherlands

View Profile
Contact Us