How VAT Works When Moving a Company’s Own Goods Between EU Countries

In previous publications, we explained how VAT works for sales in the B2B and B2C formats. The next important element of the EU VAT system is the transfer of a company’s own goods between member states. This is an operation that often raises questions and, if accounted for incorrectly, can lead to VAT errors.

What laws regulate VAT on transferring goods within the EU

• Section 13(6) of Act No. 235/2004 Coll. (“the transfer of goods by a VAT payer from the Czech Republic to another EU country is treated as a supply for consideration”).
• Section 4(5) of the same Act (“a transfer of goods means the dispatch of goods forming part of the payer’s business assets between EU member states in the course of its economic activity, without any change of ownership”).

In other words, when a company “moves” goods to itself to another EU country, this is not just a logistical movement. It is a full-fledged supply that requires recognition of a taxable event and completion of all related formalities.

Why the law treats it this way

1. The EU VAT system is built on the principle “taxation takes place where consumption occurs.”
2. If such transfers were ignored, the goods would “drop out” of VAT control: input VAT would already have been deducted in the Czech Republic, and in the country of destination the goods could then be sold without tax.

Therefore, when a company transfers its own goods:

• in the country of dispatch, a “notional” intra-EU supply arises (exempt from Czech VAT under Section 64, provided the conditions are met);
• in the country of arrival, a mirrored intra-EU acquisition arises (VAT due at the rate of the destination state).

What counts as a transfer of goods (Section 4(5))

A movement of goods is treated as a transfer if all of the following apply:

• The goods form part of the company’s business assets.
• The goods physically leave the Czech Republic and arrive in another EU member state.
• The purpose is commercial use (storage, processing, demonstration, sale).
• There is no change of ownership.

What is not considered a transfer of goods

• Transit through the Czech Republic from a third country directly to another EU member state.
• Temporary export for repair, an exhibition, etc. (provided the goods are brought back and the conditions of Section 13a are met).

A real-life example

A Czech company, “SAMURAI,” manufactures kimono uniforms for martial arts.

• On April 10, 2025, the company transfers 200 kimono sets to its own warehouse in Germany in order to sell them later to local clubs.

Step 1 — accounting in the Czech Republic

1. An internal VAT document (“daňový doklad o dodání zboží do JČS”) is issued for the value of the goods, for example:
   200 × CZK 1,800 = CZK 360,000.
2. In the EC Sales List (souhrnné hlášení), code “0” is reported (dodání do JČS — supply to another EU member state).
3. The supply is VAT-exempt (Section 64), so line 26 of the VAT return shows 0%.

Step 2 — accounting in Germany

1. Since “SAMURAI” is registered with a German VAT-ID, it records an intra-Community acquisition (innergemeinschaftlicher Erwerb) in the amount of EUR 15,000 (approximately CZK 360,000).
2. It charges German Umsatzsteuer (19%) and simultaneously claims it as input VAT, provided the warehouse is used only for taxable activities.
3. When the goods are subsequently sold to the clubs, they are subject to 19% Umsatzsteuer under the standard rules.

Result: the goods are fully integrated into Germany’s VAT system. There is no “gap” in VAT collection, even though ownership did not change.

What VAT payers should pay attention to

1. Timely registration in the destination country. Without a local VAT-ID, the transfer will not be exempt from VAT in the Czech Republic, because the “buyer” does not have a German VAT-ID.
2. Transport documentation (CMR, transfer invoice, warehouse receiving records) is the key proof that the goods actually left the Czech Republic.
3. Commission model. If you transfer goods not to yourself but to a related distributor, this is already a real supply with a change of ownership.

Conclusion

Moving your own goods within the European Union may look like an “internal” stock movement, but for VAT purposes it is treated as a full supply. To keep the transaction VAT-neutral, the dispatching company must make sure that:

• there is a valid VAT registration in the destination country,
• an internal document has been issued in the Czech Republic and the exemption under Section 64 has been reported,
• there are two independent documents confirming the physical movement of the goods,
• both mirror entries (the supply and the acquisition) have been recorded in the correct lines of the VAT returns.

A clear process and correct paperwork are the only guarantees that, even years later during a tax audit, the authorities will not assess additional VAT and penalties. If you have any doubts, it is better to consult a tax specialist in both countries in advance. That is cheaper than dealing with the consequences of a mistake.

By following the steps described above, you can transfer goods or other assets smoothly from one EU warehouse to another, preserve your right to deduct input VAT, and avoid double taxation.

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