Ex works transactions in cross-border EU trade

Where the buyer collects the goods, it is hard for the seller to track their movement. The Dutch collection declaration offers a way through, but on strict conditions.

Where goods are sold and the parties agree that the buyer arranges transport, it is often hard for the seller to track the movement of the goods. That is particularly so where the goods cross the border and leave the Netherlands, because the buyer will want a zero-rated invoice for an intra-Community supply.

In 2020 the quick fixes took effect across the EU, giving sellers tools to deal with cross-border transport within the EU. In the Netherlands there is also the collection declaration, based on what is known as Notice 38. The decree approving that declaration remains in force and offers wider scope for proving transport. Whether, and for how long, the EU will continue to allow that generous approach is an open question. We therefore always advise gathering as much evidence and information in your records as possible.

The collection declaration

The collection declaration is a document usually signed in practice by the driver of a lorry, on the buyer's behalf, at the moment the goods are physically collected. The requirements for using it as evidence are:

• the customer must be a regular customer
• that customer must declare the acquisition in another member state
• the declaration must be signed
• the buyer must cooperate where the Dutch tax authorities raise questions afterwards
• the declaration must meet the substantive requirements in the decree
• alongside the declaration there must be additional evidence supporting the cross-border transport

The decree states expressly that where a collection transaction does not involve a regular customer, the buyer pays cash and additional information or documentation is lacking, the seller cannot simply justify applying the zero rate. Where an audit shows there is insufficient evidence, the tax authorities will assess the VAT, with all that entails.

A word of caution

Because applying the zero rate is at the seller's risk, it is advisable to follow the above strictly and, where possible, to use the evidence documents from the quick fixes. If you are unsure whether your records hold enough evidence, have it checked.