From 01.01.2020 onwards, a substantive legal prerequisite for a correct tax-free intra-community (intra-EU) delivery is also a punctual submission of the summary report, which must include the intra-community delivery. In addition, the newly introduced article 6a (1) no. 4 UStG (German VAT Act) requires the customer to use a valid VAT identification number (VAT-ID) towards the entrepreneur.
Tax exemption is prohibited if the entrepreneur has not submitted the summary report according to art. 18a UStG (German VAT Act) or if it is incorrect or incomplete with regard to the respective delivery. In practice, this means that the tax office will claim VAT from the income previously treated as tax-free. It is therefore important, especially for newly established companies, to apply for a VAT-ID as soon as possible and only make deliveries after receiving the VAT-ID. A tax-free intra-community delivery without a VAT-ID valid at the time of delivery is categorically no longer possible. The alternative providing the required evidence at a later time that was possible in the past is no longer applicable.
In addition, it is recommended that the supplying company checks the VAT-ID of the recipient in the other country by means of a qualified confirmation request for validity, although German law does not require it. This should be repeated at appropriate intervals — e.g. once a year — or in the case of risk-relevant events — e.g. the event of insolvency rumours — and documented as well. This information should be collected by the company’s sales department and passed on to the accounting department.
Sales tax identification numbers (VAT-IDs) can become invalid due to various reasons: transformation of the company, tax evasion, misuse of the VAT-ID, etc.