If you want to deliver goods to other EU countries, you have to adhere to certain proof requirements with regard to the tax exemption. In general, deliveries outside of the European Union are exempt from sales tax. However, only if certain requirements are met and the entrepreneur submits a certificate of entry to the tax office. What do the mandatory details of a certificate of arrival look like? And what form is it tied to? You will find out in this post.
What is a certificate of entry?
A certificate of arrival or certificate of arrival is proof of the delivery of goods to other EU countries . It is defined in Section 17a of the Sales Tax Implementation Ordinance (UStDV) . Since January 1, 2014, all entrepreneurs who export within the EU must submit a certificate of arrival to the tax office. Only then are they exempt from sales tax.
If a German online retailer wants to deliver goods to another company and this is located in another EU country, this is an intra-community delivery . According to Section 4 of the Sales Tax Act (UstG) , such a delivery is exempt from sales tax. Among other things, the law also defines the type of sales that are tax-exempt.
In order to be able to claim the VAT exemption , requirements must be met. Among other things, the online retailer must be able to prove that the delivery has arrived at the respective foreign recipient. If there is no evidence of this, the tax office may set a sales tax .
The foreign customer is an entrepreneur and the goods ordered are for his business. The product must be delivered to the respective country, which has to be confirmed. The legislature itself created this regulation at EU level to prevent tax fraud. So-called carousel deals, in which any sham deals ensure that the money bypasses the tax, should be prevented by the entry certificate.
Entry certificate § 17a: Evidence for intra-community deliveries in transport and dispatch cases
In the text of the law we read that in the case of intra-community deliveries, the entrepreneur must provide evidence that the customer has transported or shipped the item of delivery to the rest of the community. The prerequisite must be clearly and easily verifiable from the receipt itself. Clear and easily verifiable according to Paragraph 1 means proof that is provided by duplicating the invoice according to Sections 14 and 14a of the Act. Or by a confirmation from the employee that the delivery item has reached the rest of the Community.
Background to the EU entry certificate
The ordinance amending the VAT Implementing Ordinance received the green light from the Federal Council on March 22, 2013. This includes the new obligations to provide evidence for the movement of goods from Germany to other EU countries. Accordingly, it no longer has to be a certificate of arrival, you can also use other proof of transport with the same content.
Originally, the law was supposed to simplify the situation for craft businesses and other companies. For the companies, however, this meant a huge effort to continue to send their goods to other EU countries. There were protests from companies. For this reason, the new ordinance eased the burden of proof again. The idea behind the certificate of arrival was that there should be room for better documentation of the sales-free deliveries to other EU countries.
Who has to fill in and create the certificate of entry and who has to sign it?
The entry confirmation must be signed by the buyer of the goods . He issues the confirmation and signs it. The confirmation of arrival can also be given directly to the freight forwarder who delivers the goods. However, only if this was also commissioned by the supplier.
If the shipping company refuses to obtain the confirmation of entry from the customer, the online retailer must ensure that the customer fills out and sends the confirmation. He can do this in writing and electronically.
Contents of the entry certificate
It is absolutely important that you adhere to the formal requirements. The following mandatory information must therefore be included in any case:
- The name and address of the recipient .
- The customary designation of the delivery, as well as the quantity of the item (for example, if a vehicle is delivered, the vehicle identification number must be specified).
- Place , month and receipt (or end of transport) of the item in the rest of the community.
- The date of issue of the confirmation.
- The signature of the purchaser or one of his representatives for acceptance. No signature is required in the case of electronic transmission, provided that it can be proven that the transmission began within the customer’s area of disposal.
- Evidence of the authorization to represent if the customer is not on site himself.
Form of entry certificate
There are no legal formal requirements for the entry certificate. As long as all of the information just mentioned is included, you are free to choose how to design the confirmation. If you are still unsure, you can take a look at the websites of the respective chambers of industry and commerce. There you will find proof of entry templates or templates. However, you do not have to use this if you have already provided evidence from other documents. It is only important that the required information is included in its entirety.
You can also issue the confirmation of entry as a collective confirmation . There you then summarize all sales from, for example, one quarter.
Entry certificate sample
It is easiest if you use a certificate of entry template Word or PDF and fill it in with your details. You can find various patterns online that you can download for free.
Dispatch or transport?
The law distinguishes whether the delivery is shipped or transported. When a shipment is made, a third party – a freight forwarder or courier service – usually comes into play. This brings the goods to the respective country. A transport exists when the supplier or the customer transports the goods themselves in other EU countries. In the case of a shipment, it is sufficient if the evidence is provided, for example, by means of a bill of lading , a bill of lading or a commercially available carrier certificate .
Further verification options for deliveries to other EU countries
The entry confirmation confirms receipt of the goods in other EU countries . In some cases, this can also be done by means of an informal confirmation from the recipient of the goods. For example, when sending an item via a forwarding agent. The dispatch receipt or a commercial receipt may suffice as evidence. For example a certificate from the contracted freight forwarder. However, the VAT Implementing Ordinance mentions further possibilities of proof:
- Commercial consignment notes are recognized if they have been signed by the carrier’s client and the recipient’s signature is included as confirmation of receipt of the delivery. In the case of a CRM waybill, the recipient’s signature must be present in field 24.
- The known carrier certificate is also permitted , but it must refer to the shipment that has taken place. You can also send this electronically. However, this case is only valid if the freight forwarder is commissioned by the German supplier.
- If the customer instructs the freight forwarder, the freight forwarder’s certificate can only be valid if proof of payment for the delivery item has been made on the bank account at the same time . In this case, the tax authorities recommend the entry certificate according to German requirements.
- If the progress of the consignment is monitored electronically, the written or electronic order placement and the created protocol , which provides seamless evidence of the transport route , are sufficient as proof . In the case of mail, a receipt from a postal service provider is sufficient. If proof of payment for the delivery has been provided, the tracking and tracing protocol can be dispensed with.
What is the VAT Implementing Ordinance?
The UStDV is a statutory ordinance that deals with the details of the sales tax law. In this way, a uniform application of the law by the financial administration and jurisdiction is to be guaranteed.
Tips for an entrepreneur’s practice
The entry confirmation means additional bureaucratic effort. Depending on the volume of deliveries, this can even prove to be very tedious. However, the system also has a great advantage, because it protects the state against misuse when calculating sales tax and thereby contributing to a simplified sales tax procedure . With this additional effort, you still have the option of delivering your goods to other EU countries without having to calculate sales tax .
In any case, it is advisable to email the customer a completed document in advance . This simplifies it for the customer, because he only needs to add the time of receipt of the goods and the date of issue in order to send the document back. This way you can avoid common sources of error. Also include the invoice number on the entry certificate. Although this is not mandatory, you can make a clear reference to the invoice in question.
Entrepreneurs have many things to worry about, especially paperwork. If you frequently send goods to other EU countries, send invoices or have a lot of contact with customers, you need a practical and clear accounting program.
Conclusion on the entry certificate
Anyone who does not want to charge sales tax on their goods that are sent to other EU countries is subject to the obligation to provide evidence of intra-community deliveries . This is a confirmation of arrival that is not tied to any specific form. All that is important is a series of content-related information that must be signed by the recipient of the delivery.