The “destination document”: an alternative form of proof for the transport of intra-Community supplies of goods

The requirement to provide proof of VAT exemption for intra-Community supplies is a thorny issue in many VAT audits. If the VAT authorities are not satisfied that the goods were genuinely supplied to another Member State, they will overturn the VAT exemption, with all that that entails. However, for the purposes of simplification, the VAT authorities have now published a decision outlining an alternative form of proof.

1. Background: Proof of exemption for intra-Community supplies

Intra-Community supplies of goods, which are shipments of goods dispatched or transported from Belgium to another Member State, may under certain conditions be exempt from VAT. This means they must involve:

  • The delivery of goods by a taxable person acting as such[1];
  • To a taxable person or non-taxable legal person acting as such in another Member State which is liable to pay tax in that Member State on its intra-Community acquisitions of goods;
  • whereby the goods are dispatched or transported from Belgium to another Member State by or on behalf of the buyer or the seller.

In practice, this boils down to a requirement for two different types of proof which the seller must be able to produce in a subsequent VAT audit.

a) Proof of the status of the buyer

First and foremost, the seller must be able to show that the buyer is liable to pay VAT on the intra-Community acquisition of the goods. The authorities consider this condition to be met if the seller has a valid VAT identification number for the buyer, lawfully issued by a Member State other than Belgium. So an extract from the VIES website showing that the buyer’s VAT identification number was valid at the time of supply is enough to meet this requirement[2].

        b) Proof of dispatch/transport of the goods

The seller also has to be able to show that the goods were dispatched or transported out of Belgium, but within the European Union. It can prove this using a set of ordinary and corresponding commercial documents, such as contracts, order forms, transport documents and payment documents. The authorities consider each individual supporting document to be permitted, but no single special document by itself is sufficient or essential.

In principle, the seller must be in possession of all of these documents at all times, and be able to produce them at any time at the request of the audit officials. However, the Court of Justice has held in the past that when these documents are not provided during the audit itself, but are instead provided afterwards, this cannot preclude the application of the VAT exemption.

Published case law shows that both the VAT authorities and the Belgian courts and tribunals take a fairly strict position on this requirement for the seller to produce two types of proof. Timely gathering of adequate, correct, clear and corresponding supporting documents is thus essential when applying a VAT exemption to the intra-Community supply of goods. After all, if the exemption is disallowed, it’s the supplier who has to pay the VAT – VAT which should actually be paid by its customer, but it’s not clear whether that VAT can then be claimed from the customer. VAT audits often take place quite a while after the transaction. And it’s obviously also important not to overlook the fines (10% – or 200% in case of fraud) and interest (0.8% per month on the payable VAT amount) which the VAT authorities impose in such cases.

2. Administrative simplification of proof of transport – the “destination document”

For a long time, people working in this area have been asking whether it would be possible to create a specific “proof document” to give sellers greater legal certainty with regard to the correct application of the VAT exemption on their intra-Community supplies. In decision No. E.T. 129.460 dated 1 July 2016, the authorities provided a response of sorts to this plea, by establishing an alternative document to be used as proof[3].

From 1 July 2016, the authorities accept that the transport of goods from Belgium to another Member State can be proven by a so-called “destination document”, instead of through a transport document.

The destination document must certify that the goods which were the subject of intra-Community supply are now in the possession of the buyer in an EU Member State other than Belgium. In principle, the document is prepared by the supplier, although the authorities will also accept a destination document drawn up by the customer. Obviously, the parties have to act in good faith. In the case of chain transactions, including triangular trade, the destination document must be prepared by the supplier making the exempt intra-Community supply or by its co-contractor.

For every separate supply, the seller can choose whether it wants to prove intra-Community transport using a destination document. It is also possible for a destination document to contain all intra-Community supplies to a single customer for a period of up to three consecutive calendar months in which goods were received by or on behalf of the buyer.

The destination document must contain at least the following information:

  • The name, address and VAT identification number (starting with “BE”) of the supplier;
  • The name, address and VAT identification number of the buyer (issued by a Member State other than Belgium);
  • Confirmation that it concerns the arrival of an intra-Community supply of goods as defined by Article 138(1) of Directive 2006/112/EC;The period to which the document relates;
  • A description of the supplied goods (their usual name and quantity);
  • An unambiguous reference to the sales invoice or invoices; the invoice number and date of each invoice. If no invoice has yet been issued, the reference may be to a document exchanged by the parties, which can be unambiguously linked to the invoice (e.g. an order number, delivery slip number, pro forma invoice number, etc.). Both the seller and the buyer must possess a copy of the document;
  • The month and year of receipt of the supplied goods;
  • The place where the supplied goods arrived (Member State, city/municipality);
  • The price in euros (excl. VAT) of the supplied goods.

The correctness of this information must be certified by the buyer within three months from the expiry of the period to which the document relates. The buyer may designate a person (who by virtue of their administrative role within the company may be deemed to have knowledge of purchases made by the company [4]) who in addition to his/her name, signature and the date, will write the words “Received on behalf of (name of the buyer)” on the destination document. The buyer must supply the identity and capacity of this person to the supplier in advance (by email or letter, or in some other written form).

Destination documents may be sent and confirmed by email or some other electronic method, provided the identity of the signatory can be guaranteed. The exchanged documents should then be stored together.

Obviously the supplier is still the one who needs to ensure it obtains the signed destination document from the buyer, but this recent VAT decision does give suppliers a more concrete form of proof. A form of proof that, moreover, gives rise to a rebuttable presumption of accuracy if the seller:

  • Can present the sales invoice, proof of payment and transport invoices, where the seller was responsible for transport;
  • Has submitted the intra-Community listing with regard to the goods specified on the destination document;
  • Has taken every reasonable measure in its power to ensure that it has not become involved in tax fraud in relation to the intra-Community supplies specified on the destination document.

Be aware that this destination document is an alternative form of proof for the transport document only. This is confirmed in the VAT decision, in which the authorities emphasise that they can still request documents other than transport documents to check the genuineness of the transaction and whether the details match the declarations on the destination document. So simply having a signed destination document does not give you a free pass. The seller still needs to gather other commercial documents to prove the exempt status of the intra-Community supply.

In this new VAT decision, the authorities expressly refer to case law from the European Court of Justice, in which the Court emphasised that non-compliance with a procedural requirement cannot prevent a VAT exemption from being applied, provided the fundamental conditions of the exemption scheme are met. It remains to be seen whether these European principles will be applied in practice during audits.

VAT decision E.T. 129.460 dated 1 July 2016 contains a number of templates of destination documents. Naturally, the VAT team here at Moore Stephens would be happy to help you draw up your own destination document template.


[1] Taxable persons covered by the special exemption scheme for small businesses are excluded.
[2] In the case of an ongoing trading relationship, periodic checks of the VAT identification number on the VIES website are sufficient.
[3] If the authorities observe non-compliance with the conditions of application of this decision, or more generally, misuse or attempted misuse, they reserve the right, in the future, to revoke the decision in its entirety, or deny a particular supplier the right to rely on this decision.
[4] Such as the Manager of the Accounting Department.

Author: Evy Maurits

The consequences for companies
VAT on your own construction work: an explanation of the amended law
On 29 November 2017 amendments were made to several points in the VAT Code. This amended law was explained by the administration on 12 February (in the Circular 2018/C/20). In this article we aim to consider the consequences of the amended law for companies constructing their own company building or carrying out their own repair/maintenance or cleaning work. Former situation Whenever a VAT-reg
Setting up a plegde on moveable assets will be easier
The new Pledge Act: introduction of a non-possessory pledge and extension of the retention of title
The new property law came into force as from 1 January 2018 (the act of 25 December 2016 establishing the amendment of various provisions with regard to the collateral on moveable assets, Belgian Official Journal 30 December 2016). This makes it easier to set up a pledge on moveable assets thanks to the introduction of a Pledge Register and it extends the effect of retention of title. Non-posse
New fixed benefits in kind as from 2018
Split bill rule can avoid benefit in kind for smartphones
Whenever an employer provides an employee with a free tablet, mobile telephone, telephone or data subscription that may be used for private purposes, this is considered a taxable benefit in kind. Since the beginning of this year there are fixed charges for such benefits, but in some cases it is possible for a benefit to be avoided. Fixed benefits in kind as from 2018 A fixed amount has been
An interesting way to obtain capital more advantageously?
The Belgian tax treatment of the surrender of Dutch pensions under self-administration
Just before the end of the year, the tax administration finally made the decision and published a circular (Circular 2017/C/87 dated 22 December 2017), which addresses the Belgian treatment of the phasing out of the Dutch “pension under self-administration”.  Phasing out Dutch pensions under self-administration  Until 1 April 2017, a Dutch director-major shareholder or “DGA”
Who is now obligated to use this cash register?
The long-expected circular on the 'white cash register' has been published
Many words have been written over the past few years about the registered cash register system (the 'white cash register'). In exchange for a rate reduction for restaurant and catering services to 12% (instead of 21% - except for drinks), there was a requirement for hospitality businesses to work with a registered cash register system in order to combat fraud in the sector. The question over the p
The new tax rules
New car tax legislation: wheels in motion
Traditionally in Belgium, January is all about cars. Each year, the Autosalon (Motor Show) attracts hundreds of thousands of car fans to the Heysel. This year, the spotlight will not just be on the latest models of cars – the new car tax legislation will also be grabbing all the attention. So, once more, it’s time to set out the most important changes – in both corporation and personal incom
A simple and flexible way for companies to give a bonus to their employees
The profit premium from 1 January 2018
The new profit premium gives companies the opportunity to allocate part of their profits as a bonus to their employees in a simple and flexible way. The employees receive a premium, which amounts to either a fixed sum or a percentage of their wages without the employee being allocated a voting right in the company. Definition of profit premium and conditions The profit premium is a premium pa
Reduced corporation tax: in favour of or to the detriment of the taxpayer?
A new minimum remuneration requirement
The Summer Agreement, partially translated into the Corporation Tax Reform Act of 25 December 2017 (published in the Belgian Official Gazette of 29 December 2017) introduces a reduced corporation tax rate that falls to 25% by tax year 2021. Under certain conditions, a small company can even benefit from a reduced rate of 20% on its first tranche of € 100,000 of taxable revenue. However, the
A number of regulated professions are being abolished
Abolition of professional competence in Flanders: the consequences at a glance
In accordance with the Establishment of Businesses Act, every SME, natural person or legal entity wishing to engage in a commercial activity must prove the necessary entrepreneurial skills. For most professions, a basic knowledge of business management is sufficient but for a number of others, specific professional competence is required. This is in contradiction with European legislation that sta
The 4 action points thoroughly discussed
How the Summer Agreement affects the ATAD Directive
By now it’s hardly news that Belgian corporation tax will be comprehensively reformed as part of the Summer Agreement. The proposed reforms as set out in the drafts of the Programme Act (authorising government expenditure measures) and the Recovery Act were approved on 27 October by the Cabinet. The government presented the Programme Act bill to the House of Representatives on 6 November 2017, w

Subscribe to our newsletter