What is an intra-community supply?

A wholesaler ships a pallet to a business customer in France. That is not an ordinary home sale: the goods leave the Netherlands and the buyer is a business in another EU country. VAT rules on such sales are different, and they often mean the invoice is treated differently.

At heart you have to be able to show that the buyer is a business and that the goods were actually transported. Think of the customer's VAT number, a sales invoice carrying the right wording, and proof of transport such as a consignment note.

What goes wrong? The customer's VAT number turns out to be invalid, proof of transport is missing, or the invoice was raised with ordinary VAT. Then you may be asked afterwards to pay the VAT after all. The EC Sales List and the VAT return are then not in order either.

So validate the VAT number of a new customer before the first invoice goes out, use one fixed VAT code for these sales and keep the transport document with the invoice. How the shift of VAT works is covered under reverse-charge VAT.

Whether a given sale really falls under these rules is something your bookkeeper or accountant confirms. Services and triangular deals also have rules of their own. For a wholesaler that regularly delivers to the same customers abroad, it helps to keep their details, such as the VAT number and the delivery address, permanently on the relation record. Then nobody has to look them up again with every order.