Comments on the current letter of the Federal Ministry of Finance on intra-Community supplies – Part 1

In this multi-part series of articles, we would like to present how the tax authorities comment on the changes from 01.01.2020 in the context of the so-called “quick fixes”. The principles apply to all deliveries made after 31.12.2019.

We hope you enjoy reading!

BMF letter dated October 9, 2020, III C 3 – S 7140/19/10002

The BMF letter can be found at:

Intra-community supplies

1. What are intra-Community supplies?

An entrepreneur from one EU Member State supplies goods to another entrepreneur in another EU Member State. In distinction to export deliveries, these are not made to a third country (e.g. Switzerland), but within the EU member states.


A is an entrepreneur in Karlsruhe. He sells to the Austrian entrepreneur Bakery U, located in Vienna, two ice cream machines for a total of €50,000. The machines are transported to U in Vienna on behalf of A with a contracted freight forwarder. U has indicated to A its Austrian value added tax identification number (USt-ID).


There is an actual movement of goods to the rest of the Community, U is entrepreneur who acquired the ice machines for his business. The acquisition of the ice machines is subject to the rules of turnover taxation for U in Austria. In this respect, there is basically an intra-Community supply.

2. How does the taxation system of EU deliveries work?

In principle, supplies are exempt from VAT in the Member State of origin. In the Member State of destination, they are subject to purchase taxation.

In order for the tax exemption to be claimed by the supplier, certain legal requirements, which are precisely also prescribed uniformly under European Union law, must be met.

Pursuant to § 4 No. 1 letter b) UStG, intra-Community supplies are exempt from tax. The tax burden is established by charging the purchase tax in the Member State of destination. When an intra-Community supply exists is determined by § 6a UStG.

Accordingly, an intra-Community supply according to § 6a UStG exists if the following conditions are met in the case of a supply according to § 3 paragraph 1 UStG:

“(1) An intra-Community supply (§ 4 number 1 letter b) is present if the following conditions are met in the case of a supply (excerpt Federal Ministry of Justice and Consumer Protection:
1. the entrepreneur or the buyer has transported or dispatched the subject of the supply to the rest of the Community,
2. the customer is
a) a trader registered for VAT purposes in another Member State who has acquired the subject-matter of the supply for his business,
b) a legal person registered for VAT purposes in another Member State who is not a trader or who has not acquired the subject-matter of the supply for his business, or
c) in the case of the supply of a new vehicle, also any other acquirer,
3. the acquisition of the subject matter of the supply is subject to the rules of value added tax at the customer in another Member State
4. the customer within the meaning of point 2(a) or (b) has used towards the entrepreneur a valid VAT identification number issued to him by another Member State.
The object of the supply may have been processed or handled by agents before being transported or dispatched to the rest of the Community.
(2) The transfer of an object equivalent to a supply (Section 3(1a)) shall also be deemed to be an intra-Community supply.
(3) The requirements of paragraphs 1 and 2 must be proven by the entrepreneur. The Federal Ministry of Finance may, with the consent of the Bundesrat, by ordinance determine how the entrepreneur shall furnish proof.
(4) If the entrepreneur has treated a supply as tax-exempt even though the requirements under paragraph 1 are not met, the supply shall nevertheless be regarded as tax-exempt if the claim to tax exemption is based on incorrect information provided by the customer and the entrepreneur could not have recognized the incorrectness of this information even when exercising the due care of a prudent businessman. In this case, the buyer owes the lost tax.”


3. Change under Quick Fixes effective January 1, 2020

As part of the so-called “Quick Fixes”, from January 1, 2020, among other things, the requirements for intra-Community supplies have been changed. The changes can be summarized as follows:

  • A prerequisite for tax exemption as an intra-Community supply is the correct indication of the respective supply in the recapitulative statement according to § 18a UStG. The possibilities of a correction of the recapitulative statement under § 18a para 10 UStG remain unaffected.
  • The recipient of the service (entrepreneur or legal entity that is not an entrepreneur or does not acquire the item for its business) must be registered in another Member State for VAT purposes.
  • The recipient of the service has used a valid VAT identification number (USt-IdNr.) issued to him by another Member State vis-à-vis the supplier.
  • In addition, Union law had been included for the first time on January 1, 2020 presumption rules that apply to the proof of the arrival of the object in the other Member State.


Look forward to the next post. It will be on the topic of the Summary Message!


The content reproduced is for general information purposes. All contributions are compiled to the best of our knowledge. They are neither intended nor suitable to replace an individual consultation with expert persons, taking into account the specific circumstances of each individual case. No liability can be assumed for their content. Please contact your tax advisor for your individual case.