In the case of supplies of goods where transport is carried out by or on behalf of the purchaser, monthly written acknowledgements of receipt signed by the purchaser, together with other documents, provide sufficient proof. Before 1 January 2020, only a limited number of countries had an elaborated scheme for such attestations (e.g.: in Belgium: the destination document, in Germany: the Gelangensbestätigung). When the European rules were introduced into Belgian legislation, the Belgian regime concerning the destination document was retained as an alternative regime. In fact, it appears to be more interesting than the European acknowledgement of receipt, which is unlikely to be as successful. However, relatively few Belgian companies have their customers sign a destination document. Is this right, or do they miss out on an opportunity that can avoid much discussion during checks?
In the new extended circular letter 2020/C/50 of 2 April 2020 on intra-Community goods transactions, the Belgian administration explains the role of the destination document as proof of transport. The Belgian regime also recognises the importance of a destination document for deliveries with transport by or on behalf of the seller and thus goes a little further than the European rules. We summarise the essentials for you: When is a destination document interesting for you as a supplier and when is it not?
What is the European written declaration of receipt and what should you do with it if it is sent to you?
The 'written declaration' acknowledges receipt of goods in another Member State and may serve as additional evidence to support the VAT exemption of an intra-Community supply in the case of supplies with transport by the purchaser. After all, anyone applying the intra-Community supply exemption must be able to prove, among other things, that the goods were dispatched or transported to another EU Member State by or on behalf of the vendor or the purchaser. When you receive such a destination document from your supplier, he will therefore request confirmation that the goods you have purchased from him have arrived in Belgium. Under European rules of evidence, the destination document is essential to provide sufficient proof of transport if the buyer is responsible for the transport of the goods. From a European point of view, these written declarations must be made once a month. In fact, the European rules remain quite strict. The declaration still has to be supplemented by at least 2 other documents (signed CMR, transport invoice, transport insurance document, ...), where these documents still have to originate from different parties in order to constitute sufficient proof that creates a rebuttable presumption that the goods have left the country of departure. This means that the European written declaration is not applied so much in practice.
However, if a supplier asks you to sign such a declaration, it seems advisable to us to actually do so. However, try to limit the extra administration as much as possible by asking your supplier to already include all the necessary information (the most delicate ones being: date and place of arrival and identification of the means of transport) on the document.
The Belgian Destination Document
The Belgian VAT rules go further than the European ones and give the destination document for EXW shipments greater evidential value as independent proof which does not necessarily have to be supplemented by other documents.
In addition, the Belgian rules also allow the use of the destination document if the transport is carried out by or on behalf of the seller. Together with a copy of the transport invoice, the destination document then constitutes sufficient proof, which constitutes a rebuttable presumption.
Belgian suppliers who sell EXW have, among other things, every interest in asking their customers to sign destination documents.
In the case of a chain sale (several successive sales in which there is only one transport operation), the destination document may be drawn up by the supplier's co-contractor or by the final purchaser of the goods (final purchaser in the chain).
The Belgian destination document may be drawn up globally per buyer for a maximum period of 3 months. It must be dated, signed and returned to the supplier within three months after the period to which the document relates. Signing may be done by the buyer himself or by a person authorized by him, e.g. an accountant, a third party warehouse keeper, a warehouse employee, etc. In that case, the signature must be preceded by the words 'on behalf of buyer'.
What can you use a destination document for?
If, in an intra-Community context, you supply goods to a customer identified in another Member State, you must always provide proof, by means of a set of documents, that the goods have indeed been transported to another Member State. In principle, you must always be in possession of all documents proving transport outside Belgium. During an audit, the tax authorities may assess whether the supplier has provided sufficient proof.
You may use the destination document to provide this proof of transport, without any other additional document having to be produced, provided of course that the destination document does not conflict with the other supporting documents of the sale (contracts, order forms, invoices and payment documents).
What must the destination document contain?
The destination document must contain the following information:
- the seller's name, address and Belgian VAT number;
- the name, address and VAT number of the buyer in the Member State (other than Belgium) where he will receive the goods;
- confirmation that the destination document relates to the arrival of goods in the context of a VAT-exempt intra-Community supply;
- the place of arrival of the goods (address outside Belgium);
- the common name and quantity of the goods and, in the case of vehicles, the identification number of the vehicle;
- the date and number of the invoice or, if the invoice has not yet been issued, any other reference unambiguously connected with the invoice;
- the date of receipt of the goods delivered.
When is a destination document interesting to use?
It is particularly interesting to use a destination document when few other documents are available to you relating to intra-Community transport. We are thinking in the first place of the situation in which your customer himself collects the purchased goods in Belgium in order to bring them back to his own Member State (delivery 'Ex works'). Since in this case the transport is organised entirely beyond your control, it is often difficult to have sufficient proof of the transport. However, by means of the destination document, your customer can confirm to you that the goods have indeed arrived in another Member State and this constitutes a rebuttable presumption of the transport during an audit.
Even if you are going to deliver the goods to another Member State using your own means of transport, the destination document may be useful, as in this case, for example, no invoices from a transport company will be available. You can then present the destination document to your buyer immediately upon arrival. In this way, you have some degree of control over the signing of this document. Another alternative is a periodic destination document.
… And when not?
If you have goods delivered to the consignee in another Member State by a transport company, which will always provide you with a CMR document signed for receipt of the delivered goods, a destination document will offer little added value. After all, the invoice from the transport company and the signed CMR document and the payment for the transport are sufficient proof that the transport has taken place.
In this case, it would not appear necessary (or even useful) to request another signed destination document from the consignee of the goods.
In such situations, a destination document will only constitute an additional administrative burden for both you as the seller as well as the buyer.
Can the VAT exemption simply be applied when a destination document is available?
To the extent that you knew or should have known that the goods sold by you would remain in Belgium after the sale, even a signed destination document cannot be used as evidence for the VAT exemption. Take, for example, the situation where you sell building materials to a Polish contractor where you know that these materials will be used on a building site in Belgium. In such cases, you will always have to charge Belgian VAT (except in cases where another VAT exemption applies).
In addition, the tax authorities can always provide proof to the contrary that the destination document is incorrect and that the goods have not arrived as declared.
In certain cases, a destination document can certainly be a useful tool to easily prove the intra-Community transport of goods. However, it does not seem necessary to have the destination document signed by the purchaser for each intra-Community supply.