Call-off Stock Contracts in Spain and Differences with the Consignment Stock
International trade within the European Union is experiencing significant simplification thanks to new Call-off Stock regulations. This regime offers significant advantages in inventory management and VAT compliance. Let’s explore how this system works and its main differences from Consignment Stock.
Call-off Stock in Spain
Call-off Stock represents a commercial agreement where a supplier transfers goods to a warehouse available to a predetermined buyer in another EU Member State. The uniqueness of this regime lies in the fact that the transfer of ownership occurs only when the goods are actually withdrawn by the buyer.
Until recently, EU companies wishing to ship their goods to a third-party warehouse in Spain for later sale to the end customer had to follow the procedure established for Consignment Stock (or delivery on consignment) by obtaining a tax identification number / VAT number in Spain.
Now, under the VAT Directive 2006/112/EC, effective in Spain since January 1, 2020, it is no longer necessary to obtain a tax identification number abroad if the goods are already predestined for a single, or at least specific customers. The EU company will carry out a simple intra-community supply directly to the end customer. For this reason, it is important that the delivery note clearly specifies the final customer recipient, regardless of the fact that the goods will be “stored” temporarily at a third-party warehouse.
However, if the EU company has various unidentified customers in Spanish territory, in our opinion, it is more prudent and correct to have this company identified in Spain and follow the normal Consignment Stock procedure as described above.
The Call-off Stock regime in Spain offers numerous advantages but requires proper tax management to avoid penalties or regulatory issues. Lawants, specialized in tax consulting in Spain, can guide you in understanding and applying these systems, ensuring full compliance with Spanish VAT regulations. Contact us.
Call-off Stock Contracts in Spain
The Call-off Stock contract shares similarities with the estimatory contract (Article 1556 of the Italian Civil Code) but has specific features for intra-community trade. It is essential that the contract clearly specifies:
- The identity of the predetermined buyer
- Warehouse management procedures
- Parties’ responsibilities
- Goods withdrawal timelines
Requirements
- In the call-off stock contract with the Spanish customer, one of the mandatory requirements is that transport must be arranged by the supplier to benefit from VAT exemption. The goods must be transported or shipped to Spain by the supplier, or by a third party acting on their behalf.
- The goods must be transported to Spain with the intention of being transferred at a later stage (within twelve months) in Spain.
Key Operational Aspects
- Timelines: Goods must be transferred within 12 months of arrival in Spain
- Availability: The Spanish customer can withdraw goods at any time
- Documentation: Detailed records of goods under Call-off Stock regime must be maintained
- Transfer: If transfer doesn’t occur within 12 months, it is considered completed the day after expiration
Differences from Consignment Stock
Unlike Consignment Stock in Spain, the Call-off Stock regime:
- Requires a predetermined buyer
- Does not require tax identification in the destination country
- Provides simplified VAT management
Conclusion
- As always, each specific case and concrete operation must be verified.
- Generally, the simplified Regime provided by the Directive is for companies that supply customers directly abroad using a third-party warehouse as a simple “logistics depot”. Among other requirements, it is important that the logistics operator is not exclusive to the EU company to avoid permanent establishment issues. For this reason, it is crucial that the contract with the logistics operator is verified by a Spanish tax expert.
- The VAT Directive 2006/112/EC was implemented in Spain on January 1, 2020.
- If an EU company has more than one customer in Spanish territory, and the shipped goods have not been “assigned” yet, we advise and recommend obtaining identification in Spain following the Consignment Stock procedure.
If conditions are met, the Directive ensures that the transfer of goods is considered VAT-exempt for the sender and an intra-community acquisition for the transferee in the destination Member State.
If you have any doubts, don’t hesitate to contact us to learn more about the Call-off Stock procedure in Spain and its difference from Consignment Stock in Spain.
