What is meant by intra-Community supplies?

Intra-Community supplies refer to the delivery of goods within the European Union (EU). These supplies are exempt from VAT under certain conditions. More precisely, taxation is shifted to the buyer (recipient) in the destination country, as the corresponding intra-Community acquisition must be taxed there. Intra-Community supplies are defined in Art. 138 of the VAT Directive and sec. 6a of the German VAT Act (UStG).

A fundamental requirement is that the item being delivered is actually transported from one EU Member State to another (sec. 6a para. 1 sentence 1 no. 1 UStG). A physical border crossing is necessary.

Additionally, the acquisition of the item by the recipient in the other EU Member State must be subject to acquisition VAT (sec. 6a para. 1 sentence 1 no. 1 UStG). This does not mean that the recipient must actually declare and tax the intra-Community acquisition. It is sufficient that acquisition VAT is provided for under the VAT regulations in the destination country.
 

What counts as an EU Member State?

As the name suggests, it depends on whether a country is a member of the European Union. The following countries currently qualify:

• Austria
• Belgium
• Bulgaria
• Croatia
• Cyprus (excluding the areas not under the effective control of the Republic of Cyprus)
• Czech Republic
• Denmark (excluding Greenland and the Faroe Islands)
• Germany (excluding the territory of Büsingen, the island of Helgoland, and the free ports of Bremerhaven and Cuxhaven)
• Estonia
• Finland (excluding the Åland Islands)
• France (excluding Guadeloupe, French Guiana, Martinique, Mayotte, Réunion, Saint-Barthélemy, and Saint-Martin), including the Principality of Monaco
• Greece (excluding Mount Athos)
• Hungary
• Ireland
• Italy (excluding Livigno, Campione d’Italia, and the part of Lake Lugano belonging to Italian territory)
• Latvia
• Lithuania
• Luxembourg
• Malta
• Netherlands (excluding the overseas territory of Aruba and the islands of Curaçao, Sint Maarten, Bonaire, Saba, and Sint Eustatius)
• Poland
• Portugal (including Madeira and the Azores)
• Romania
• Slovakia
• Slovenia
• Spain (including the Balearic Islands, excluding the Canary Islands, Ceuta, and Melilla)
• Sweden 

These areas are collectively referred to as the Community territory.
However, from a VAT perspective, not all national territory is always considered part of the EU Member State. The list above includes notes in parentheses where parts of countries are excluded or included for VAT purposes.

The United Kingdom of Great Britain and Northern Ireland has not been an EU Member State since 01.01.2021. However, Northern Ireland has a special VAT status and is still considered part of the EU Community territory for goods movement. The same applies to the UK’s sovereign base areas in Cyprus (Akrotiri and Dhekelia), which are considered part of the Republic of Cyprus.

What types of intra-Community supplies exist? 

Intra-Community supplies can be divided into the following categories:

1. Supplies to taxable persons (sec. 6a para. 1 sentence 1 no. 2 letter a UStG)

The vast majority of intra-Community supplies are those made to other taxable persons that are registered for VAT purposes in another EU Member State and acquire the item for their business. In this case, it is also required that the purchaser provides the supplier with a valid VAT identification number (VAT-ID) from another EU Member State.

2. Supplies to non-taxable legal entities (sec. 6a para. 1 sentence 1 no. 2 letter b UStG)

Supplies to legal entities that are registered for VAT purposes in another EU Member State but are not considered taxable persons under VAT law, or that do not acquire the item for their business, are also considered intra-Community supplies. Here too, the legal entity must provide the supplier with a valid VAT-ID from another EU Member State.

3. Supplies of new vehicles (sec. 6a para. 1 sentence 1 no. 2 letter c UStG)

Supplies of new vehicles to another EU Member State are always considered intra-Community supplies, regardless of the VAT status of the purchaser. Supplies to non-taxable purchasers also qualify. However, the vehicles must meet the definition of “new” under VAT law. These are:

• Motor-powered land vehicles with an engine capacity of more than 48 cubic centimeters or a power output of more than 7.2 kilowatts, and either not more than 6,000 kilometers driven or first put into service no more than six months ago  

• Watercraft longer than 7.5 meters, and either not more than 100 operating hours or first put into service no more than three months ago

• Aircraft with a maximum take-off weight of more than 1,550 kilograms, and either not more than 40 operating hours or first put into service no more than three months ago

Why is the VAT-ID so important?

For supplies to taxable persons (see above point 1) and to legal entities (see above point 2), the purchaser must provide the supplier with a valid VAT Identification Number (VAT-ID) from another EU Member State.

It is important to note that the intra-Community supply is only exempt from VAT if the VAT-ID is valid at the time of delivery (= start of transport) and if the VAT-ID actually belongs to the purchaser. Both can be verified through a qualified confirmation request at the Federal Central Tax Office (Bundeszentralamt für Steuern). This allows early identification of whether a VAT-exempt invoice to the customer is permissible, based on the validity of their VAT-ID.

The purchaser’s VAT-ID does not necessarily have to originate from the destination country. A VAT-ID from any EU Member State other than the country of dispatch is sufficient. Otherwise, triangular transactions would not be possible, where the first purchaser (to whom the intra-Community supply is made) must use a VAT-ID that does not belong to either the dispatch or destination country.

A valid VAT-ID also has further practical relevance: the intra-Community supply must be declared in the recapitulative statement (Zusammenfassende Meldung). The invoice amount must be reported under the purchaser’s VAT-ID. If an invalid VAT-ID is provided, the recapitulative statement will not be processed by the Federal Central Tax Office, and a correction request will be issued.

See KMLZ VAT Newsletter 19/2025: VAT-ID verifications only possible online from 20 July 2025
Discover our digital solution: VAT-ID Verifier

Why is the recapitulative statement important?

The recapitulative statement (Zusammenfassende Meldung, ZM) is not only an important control mechanism for tax authorities to verify whether supplies between EU Member States are correctly recorded. A correct ZM is also a prerequisite for an intra-Community supply to be exempt from VAT.

The law states that the intra-Community supply is not exempt from VAT if the supplier has failed to submit the recapitulative statement (sec. 18a UStG), or if it has been submitted incorrectly or incompletely with respect to the specific supply (sec. 4 no. 1 letter b UStG).

This means not only that the intra-Community supply must be declared in a ZM as a general rule. It must also be declared with the correct value and in the correct ZM. An intra-Community supply is considered executed when the transport begins. Therefore, it must be declared in the ZM for the month in which the transport begins. If it is reported in the wrong month, the ZM is incorrect in that respect, and the VAT exemption is retroactively revoked. If the ZM is subsequently corrected, the intra-Community supply becomes retroactively VAT-exempt again.

See KMLZ VAT Newsletter 59/2022: Annual Tax Act 2022: relief for intra-Community supplies / restrictions in the input VAT refund procedure

Special Cases

Intra-Community supplies may also exist in situations where it is not immediately obvious. Under certain conditions, the following cases may still qualify as intra-Community supplies:

• Storage arrangements, especially consignment stock
  In a consignment stock arrangement, the goods remain the property of the seller until the customer withdraw them from the stock. If the seller transfers the goods from one EU Member State to another and stores them there, allowing the customer to withdraw goods at any time, special rules apply. 
  Technically, the transfer constitutes an intra-Community movement, which is treated as an intra-Community supply to oneself. The withdrawal by the customer is then considered a local supply in the country where the warehouse is located.
  However, there is a simplification rule for such storage arrangements under Art. 17a of the VAT Directive / sec. 6b of the German VAT Act (UStG). If the conditions specified there are met, the withdrawal from the warehouse is treated as an intra-Community supply, and the transfer is ignored for VAT purposes.

• Processing or working on goods
  If the item being delivered is processed or worked on in the country of dispatch or in another EU Member State on behalf of the purchaser, this does not exclude VAT exemption. According to sec. 6a para. 1 sentence 2 UStG, such cases still qualify as intra-Community supplies, provided the other conditions are also met.
  This applies at least from the German perspective, where this rule is codified in law. Some EU Member States have similar provisions, but only as administrative guidelines. Many EU Member States do not recognize such simplification rules at all.

Documentation Requirements 

The VAT exemption for an intra-Community supply heavily depends on proper documentation. The supplier who wishes to claim the exemption must provide evidence that either they or the purchaser transported or dispatched the item to another EU Member State.

For a long time, the rules varied significantly across EU Member States, making it difficult for businesses to understand and comply with the correct documentation requirements. Therefore, in 2020, a harmonized EU regulation was introduced. Article 45a of EU Regulation 282/2011 / sec. 17a of the German VAT Implementation Regulation (UStDV) defines the conditions and the types of documents that allow the supplier to presume that the goods have been transported to another EU Member State. The advantage of this rule is its uniform application across all EU Member States. The disadvantage is that the requirements are very strict and often difficult or nearly impossible to meet in practice.

In addition, many EU Member States have retained their previous national rules, Germany included. From the German perspective, proof can still be provided under sec. 17b UStDV using one of the following alternatives:

• Confirmation of arrival  (sec. 17b para. 2 no. 2 UStDV):  A statement from the purchaser confirming that the item has arrived in another EU Member State and has been received there  

• Shipping document (sec. 17b para. 3 no. 1 letter a UStDV): A signed consignment note (by sender and recipient) or bill of lading  

• Forwarder’s certificate (sec. 17b para. 3 no. 1 letter b UStDV): Confirmation from the appointed freight forwarder that the item was transported to another EU Member State and handed over to the recipient 

• Shipping protocol (sec. 17b para. 3 no. 1 letter c UStDV): Order to a service provider (e.g., courier) and a protocol that documents the transport seamlessly up to delivery to the recipient (track & trace)

• Receipt confirmation (sec. 17b para. 3 no. 1 letter d UStDV): Confirmation that the postal service received the shipment addressed to the recipient (plus proof of payment for the supply by the purchaser)

Legitimate Expectation

Intra-Community supplies carry certain tax risks, such as incorrect information or invalid VAT IDs. It is not uncommon for fraudsters to exploit the VAT exemption system for intra-Community supplies to commit tax evasion. In such cases, the VAT exemption may be retroactively denied by the tax authorities. To protect themselves, businesses should regularly verify their customers’ VAT-IDs and establish internal control procedures.

If it later turns out that the conditions for VAT exemption were not met due to false information provided by the customer, the supplier can rely on legitimate expectation. In this case, the supplies remain VAT-exempt even though the conditions were not actually fulfilled. However, the supplier must have exercised the so-called due diligence of a prudent merchant and must not have been able to recognize the incorrectness. This means that the supplier must demonstrably have taken appropriate measures to protect themselves against fraud and false information.