In a decision of 18 June 2015, the tax court Niedersachsen (Lower Saxony) expressed its disagreement with the tax authorities‘ opinion regarding consignment stocks (case no. 5 K 335/14). The case concerned supplies from the EU to a call-off stock in Germany. The tax court decided that the respective contractual agreements of the parties are essential for the VAT treatment. It is yet to be determined whether an unconditional purchase agreement had already been put in place prior to the goods being shipped to the warehouse. It is now evident that companies may not rely on the rules for consignment stocks as contained in the German VAT Circular. Both, suppliers and customers need to carefully check what is agreed in terms of their consignment stock contracts.