EC Sales List (ESL) Changes: Things You Need to Know

April 1, 2020

An EU-wide tax reform called Quick Fixes 2020 was introduced at the beginning of the year and a big part of it concerns call-off stock. Before the reform, if a business moved stock from one EU country to another, it didn’t had to get a VAT number at the destination country to place it in a consignment warehouse. After the reform, the supplier has to enter the client’s VAT number in the ESL form when moving the stock. Because of this change, EU countries have to update their ESL forms so that companies can properly report stock movements and file a correct VAT return for the appropriate sales.


What does this mean for businesses?

Some changes concern the ESL forms that you have to submit but these will be updated and sent out by the authorities at a later stage. What businesses should do right now is to check whether the Quick Fixes reform affects their VAT status and duties. Constant adjustments will be made in the following months and years as countries are starting to implement the new rules. That’s why it’s important to check the status for each country separately.
Due to new rules and forms, filling of VAT return can become quite confusing for many businesses.


What should the EC Sales List contain?

Filling an ESL document is quite simple. It should have the following information:

  • customer’s country code;
  • customer’s VAT ID;
  • details of the customer;
  • value of the product (in national currency);
  • a short code to specify the order (in the Indicator Column).

This data is necessary for all transactions carried out with other EU businesses that have a valid VAT number.



Who has to submit an EC Sales List?

All companies that are selling goods and services to other EU businesses need to fill out this list and submit it to the proper authorities. All intra-EU turnovers have to be reported. This report concerns products movement, thus, sellers, that are only moving goods to their VAT-registered company branches in other EU countries, are affected and filing a proper VAT return for them becomes more important.

An EC Sales List is mandatory if:

  • products are moved to VAT-registered companies in other EU countries;
  • product`s credit notes are provided to VAT-registered companies in other EU countries;
  • products are moved to own VAT-registered subsidiaries or branches;
  • a VAT-registered company that accounts for VAT receives services.

If another supplier takes care of the shipping in another EU country, this also has to be reported in the ESL so that VAT return can be properly submitted later.


How to submit the ESL?

This can be done in two ways: electronically or by post. Many choose to do it electronically because it’s more convenient and faster. In most countries, call-of-stock information can be filed exclusively only electronically. It should be noted that the way business submits ESL affects the submission deadline.


When the EC Sales List should be submitted?

Each country has a separate deadline. For example, in the UK it has to be sent to the HMRC at the end of each calendar quarter when the sales were made to another EU country during that period. If no services were provided during that quarter, then there is no need to submit an EC Sales List.


Simplified ESL

Sellers can submit simplified ESLs and then do a VAT return, but they must fall under certain criteria. This applies to businesses that mainly operate within a specific country and don’t carry out many cross-border transactions in Europe. It also includes certain revenue limits in each EU member state, which has to be checked for each member state individually.

To continue conducting their business without any issues or penalties, companies that operate in the EU must familiarize themselves with the Quick Fixes reform and the EC Sales List changes.