Based on the opinion of the German Federal Ministry of Finance (Bundesfinanzministerium – BMF) the simplification rule is only applicable if the supplier transports the goods himself. In case the recipient organises the transport or the goods are transported by a third party freight forwarder, the simplification cannot be used. Germany has a simplification scheme in place which allows suppliers to treat the cross-border transaction as an intra-community transfer of own goods. In such a case, the supplier reports an intra-community supply in the EU member state of dispatch and an intra-community acquisition in Germany. The delivery to the recipient of the goods in Germany is treated as a domestic supply of goods and charged with local German VAT.

This simplification rule is very useful as the supplier has only a limited administrative effort. Furthermore, the VAT numbers of the recipients neither need to be requested nor verified on regular basis (which might be a huge administrative burden).

The new limitation of the use of the simplification will not generate more revenue for the tax authority but it will create lots of administrative work which could be easily avoided.