A&M Tax Advisor Update
Eurostat, the statistical office of the European Union has advised that new Intrastat requirements will come into force with effect from 1 January 2022. The change will impact any business dispatching goods from one EU Member State (‘MS’) to another.
Essentially there are 2 new data elements that will be required from January 2022 onwards. These are:
• Partner VAT ID
• Country of Origin
The Partner VAT ID that needs to be declared is the VAT number of the customer to whom the goods are dispatched. The VAT registration number should also include the ISO2 country code prefix. For example, France is FR and Germany is DE. The VAT numbers can be validated on GOV.UK.
For movements of goods where the goods are shipped to a different MS to where the customer is located e.g. triangular transactions, the VAT number of the entity/person who receives the goods should be used. If you do not have this information, then you should use the VAT number of your customer.
For own goods movements e.g., movements between your own EU warehouses, the Partner VAT ID declared should be your VAT number in the destination MS of the goods.
If the goods have been shipped to private individuals or non-VAT registered businesses, as in the case of distance sales, then you should use the code QV999999999999. This is the only time that you can use this code.
Country of Origin ( CoO) refers to the country where the goods were originally wholly manufactured or produced. For goods produced in more than one country, the CoO will be the country where the last substantial economic transformation took place. This means the country where the goods last underwent processing which resulted in a change in the goods’ Harmonised System level 4 (HS4) commodity code. Work that does not result in a change in the goods’ HS4 commodity code, such as splitting consignments or repackaging goods, will not be enough to affect the goods’ CoO. Please note, CoO information is required purely for statistical purposes rather than part of the Customs requirements.
If you are shipping goods that originate from the UK, then you are required to provide the CoO information. You must use code XI if the goods originated in Northern Ireland, and XU if the goods originated in Great Britain (England, Scotland and Wales).
From 1 January 2022, Intrastat will only apply for movements of goods between Northern Ireland and the European Union (EU). Movements between Great Britain (England, Scotland and Wales) and the EU will no longer be covered by Intrastat.
The Intrastat thresholds from 1 January 2022 are (i) £500,000 for arrivals (NI imports from EU) and (ii) £250,000 for dispatches (NI exports to EU) whereas the delivery terms threshold will remain at £24,000,000.
There are a number of things you should do to ensure that you are compliant with the new rules, most of it impacting your ERP system/reporting systems.
• Product master data
All product master records should be reviewed to ensure that the correct CoO is recorded in the product master file. If there is data missing, an exercise should be undertaken to obtain this information and update the product master file.
• Customer master data
Al customer master records should be reviewed to ensure that a valid VAT registration number, including the IS 2-digit country code, is recorded in the customer master file. Missing VAT registration numbers should be obtained and added to the customer master file.
• Intrastat Dispatch Report
The Intrastat dispatches report should be amended in order to bring into the report these 2 additional pieces of information. As this is an EU wide change, your ERP provider may have already provided a system fix to amend the Intrastat report, so we recommend liaising with your IT contacts to ensure any changes have been correctly applied.
Our indirect tax advisory team within A&M Tax is already assisting clients on this matter, therefore if you have any questions regarding the technical considerations set out in the article or the systems implications of the change, then please reach out to any of the authors or your usual A&M VAT adviser.