1 Nov 2012

Stringent German VAT law should not discourage transactions there

By Rebecca Dark

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Germany has launched the Gelangensbestätigung, a certificate of reception for the supply of intra-EU goods, which is due to come into effect on 01 July 2013, and will act as confirmation of arrival of goods in the European Union (EU) country of destination.

The document, previously due to come in to force 1 January 2013, must be signed by recipients in the country of destination and German suppliers will be required to hold one for all transactions in order for them to be classed as VAT-exempt.

The Gelangensbestätigung has been introduced in a bid to simplify the documentary evidence that is needed to prove an intra-EU supply transaction from Germany. However, it is also a tightening of the rules. ‘Missing trader’ fraudsters, have in the past for example, exploited the VAT-free movement of goods between the Member States by charging VAT on the sale of goods, without passing it on to the tax authorities.

“The context of the ‘fraud’ referred to is based on the principle that goods move between businesses located in two separate EU Member States free of VAT and then change hands between parties in the same Member State with VAT. That means, in theory if not in practice, that the supplier can connive with his customer to pretend that the goods have been sold on an intra- EU basis so that no VAT is applied,” explained Ayuk Ntuiabane, director at Moore Stephens Consulting Limited. “Worse, upon receipt of the goods tax-free the buyer in another Member State can sell the goods to his own customer in his own Member State charging VAT which he then pockets and disappears. So from the perspective of the tax authorities, the Gelangensbestätigung should help prevent such fraud by ensuring that the essential conditions for VAT exemption on an intra-EU supply from Germany are met.”


The document will need to contain:

• The name and address of the customer;
• The amount and tariff classification of the goods supplied;
• If the goods are transported by the supplier or on behalf of the supplier or the customer, the place and date of receipt of the delivered goods in another EU Member State;
• If the goods are transported by the customer, the date and place of the end of the transport in another EU Member State; and
• The signature of the recipient or carrier as confirmation of the receipt or transportation of the goods, respectively.

One of the problems with such a document, despite its attempt to simplify intra-EU transactions, is that will add another set of criteria to sales and delivery documentation and will also increase the administration work carried out by those that receive the goods.

“The German suppliers are having to incorporate the Gelangensbestätigung form as part of their sale and delivery paperwork - on top of the usual commercial documentation like invoices, packing lists and delivery notes,” explained Ntuiabane. “The customers are having to go to the additional trouble of having the form signed and returned to the German supplier. It is an additional obligation on businesses. It leaves the German supplier and their customers from other EU Member States with less flexibility in their circumstances. They must now co-operate to ensure this particular document is in place or risk a German VAT liability on that supply from Germany. That is rather demanding and the businesses are likely to argue (and they are arguing vigorously) that the measure will be burdensome and would increase their administrative costs. Think how many independent parties may be involved in the movement of goods sold – brokers, transportation companies, freight forwarders, etc.”



With the Gelangensbestätigung coming into force in 2013, the thoughts are on how much it will discourage those in the superyacht industry that use German companies to supply equipment for refits or upgrades. Ntuiabane stressed that, with the right guidance, new builds and refit projects should remain fairly unhindered but the final product itself will remain subject to Gelangensbestatigung:

“The VAT liability of such supplies is not wholly dependent on the movement of the goods themselves out of Germany. The supplies of goods involved in these works means that the goods are typically fitted to, or incorporated in, the vessel itself at a German shipyard, which vessel would then leave Germany in one piece. Where the right VAT structure is in place, the signed Gelangensbestätigung can then evidence the arrival of the yacht in another Member State after the works. Buyers of sundry goods to be transported out of Germany would however need to watch out for potential pitfalls and complications.”

To read more about the Gelangensbestätigung read Moore Stephens’ October Yachting Note ‘New German boat named “Gelangensbestätigung”’ here.

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Moore Stephens Consulting Limited - company profile

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