VATNIEU4920 - Call-off stock simplification: general principles
If the key conditions are met, then the general principle is that the goods are moved by the supplier to the destination territory where they are to be stored pending call-off by the customer. The storage location can belong to the customer, the supplier (subject to the establishment conditions VATNIEU4910) or be third-party premises.
The initial movement of the goods is not treated as a supply for VAT purposes. Paragraph 58 of schedule 9ZA. This in effect delays the accounting for the supply until the goods are called off.
58. The removal of the goods from the origin territory is not to be treated by reason of paragraph 30 of Schedule 9ZB as a supply of goods by the supplier.
Although the movement is not a supply there is a requirement to report the movement on an EC sales list (see VATNIEU4930)
Call off.
The treatment described below applies subject to meeting conditions that:
- the supply is made within 12 months of the arrival of the goods in the state of destination.
- there has not been a prior relevant event.
When the goods are called off by the customer the supplier makes the supply of the goods to the customer for VAT purposes. This supply should be treated as giving rise to the intra-single market transaction at that time. This means that the supplier makes a supply of the goods in the state of origin and the customer acquires the goods for VAT purposes in the state of destination.
The normal time of supply and VAT accounting rules as set out in Notice 725 will apply.
This includes the requirement to make the normal EC Sales List declaration for such a supply.
In addition, the Call-off Stock Register should be updated to record the call-off of the goods by the customer.
VATNIEU4940 explains what is meant by a relevant event and what to do if the goods are not called off within 12 months of arrival.
Paragraph 59 of schedule 9ZA
59(1) The rules in sub-paragraph (2) apply if:
(a) during the period of 12 months beginning with the day the goods arrive in the destination territory the supplier transfers the whole property in the goods to the customer, and
(b) during the period beginning with the day the goods arrive in the destination territory and ending immediately before the time of that transfer no relevant event occurs.
(2) The rules are that:
(a) a supply of the goods in the relevant territory is deemed to be made by the supplier,
(b) the deemed supply is deemed to involve the removal of the goods from the origin territory at the time of the transfer mentioned in sub-paragraph (1),
(c) the consideration given by the customer for the transfer mentioned in sub-paragraph (1) is deemed to have been given for the deemed supply, and
(d) an acquisition of the goods by the customer in pursuance of the deemed supply is deemed to take place in the destination territory.
(3) In sub-paragraph (2) and in paragraphs 60(2) and 61(2) “the
relevant territory” means:
(a) where the origin territory is Northern Ireland, the United Kingdom, or
(b) where the origin territory is a member state that member state.
(4) For the meaning of a “relevant event”, see paragraph 63.