Publication date: September 10, 2025
The international transport of goods is subject to numerous regulations. A key issue in this context is the taxation of transport. Businesses are increasingly using the consignment warehouse method, also known as call-off stock, due to its cost-effectiveness and convenience. This method became even more popular in 2020, when EU regulations came into force exempting contractors from VAT in certain aspects.
1. NATURE AND IMPLEMENTATION OF EU REGULATIONS
On 1 January 2020, an amendment to Council Directive (EU) 2018/1910 of 4 December 2018 and certain regulations as part of the “Quick fixes” package entered into force, aimed at streamlining and facilitating intra-Community trade. Poland implemented these solutions only on July 1, 2020, in part due to the outbreak of the coronavirus pandemic. The new provisions were introduced into the Act of March 11, 2004 on the Goods and Services Tax (VAT Act).
Call-off stock method involves the supplier transporting the goods to a warehouse, not necessarily belonging to the buyer, but located close to it, where the goods remain for a specified period of time and during this period the buyer can collect the goods as needed.
In the context of an agreement between a supplier and a warehouse owner, this represents a unique solution characterized by a mixed legal structure: it contains elements of a commission agreement and a warehouse agreement. A consignment warehouse agreement is concluded for the purpose of storing goods, while a consignment sale agreement is concluded when the storage is linked to a sale. This applies to agreements concluded between the supplier and the person providing the warehouse. The Polish consignment warehouse model addressed situations in which the future buyer of the goods is unknown – this solution has existed in Polish law since 2008. However, the EU model only applies to situations in which the buyer is identified at the time of delivery. This model is called a call -off stock and was introduced due to significant differences between national models, for the purpose of standardization.
This is also a method for suspending taxation under a special procedure, as VAT is paid only when the right to dispose of the goods as an owner is transferred to the buyer. This typically occurs in the case of transport between two European Union countries, but this procedure is also used for domestic trade. The Polish VAT Act contains two segments regarding the call-off stock procedure – one for goods entering a warehouse in Poland (Section II, Chapter 3a) and one for goods entering from Poland into warehouses in another European Union member state (Section II, Chapter 3b). This distinction positively impacts the clarity of the regulations.
The eligibility for this procedure and the associated tax suspension depends on meeting specific conditions. If these conditions are not met, the movement of goods will have to be taxed in Poland as a non-transactional intra-Community supply of goods (Article 13 of the VAT Act) and taxed again in the country to which the goods are transported as a non-transactional intra-Community acquisition of goods (Article 9 of the VAT Act). To do this, the Polish taxpayer would have to register for VAT in the country to which the goods are transported. However, if the conditions are met, the tax is only payable once, at the time of actual transfer of the right to dispose of the goods as owner to the buyer. The Polish taxpayer settles the transaction as a normal intra-Community transaction in Poland, without the need to register in another country, and the movement of goods itself is not treated as a separate transaction.
2. CONDITIONS FOR USING THE CALL-OFF STOCK PROCEDURE
Article 13h et seq. of the VAT Act specifies the conditions that must be met in order to use this procedure.
The goods must be transported from Poland to another European Union member state. Otherwise, there would be no point in using this procedure, as the transport of goods using a consignment warehouse only within Poland is taxed in the standard manner.
The purpose of transporting goods outside Poland must be their subsequent delivery to the buyer, but this must be separated in time – delivery cannot take place immediately after the goods are transported; the buyer acquires the goods after some time. Otherwise, it would be a standard intra-Community transaction.
Before the procedure begins, an agreement must be concluded between the supplier and the buyer. This agreement must include the intention to conduct a call-off stock transaction. This also implies another requirement: before transporting the goods, the supplier must know the buyer’s identity – their name/first name and surname, and the EU identification number. It is not possible to transport goods under this procedure without the purpose of concluding a transaction with a designated buyer.
The supplier cannot have a registered office or permanent establishment in the country where the warehouse to which the goods are transported is located. Otherwise, they must be registered for VAT there anyway, so the transaction is conducted according to general tax regulations.
The buyer must be registered as a taxable person for intra-Community transactions. This is most important when the goods begin to be transported; it is irrelevant when the agreement is concluded. However, registration cannot occur after the agreement is concluded.
The supplier must keep records of goods moved under the call-off stock procedure. The supplier must indicate the transaction and provide the buyer’s EU identification number. The legal basis for this obligation is Article 243(3) of the 2006 VAT Directive.
According to Article 7, Section 1 of the VAT Act, delivery is the transfer of the right to dispose of goods as an owner to the buyer. This concept is broader than the simple legal transfer of ownership of goods; it emphasizes the economic dimension and also encompasses situations in which ownership has not yet formally passed to the buyer, but the buyer has received and disposed of the goods, becoming an independent possessor. All situations in which a transfer of legal title has occurred are therefore included in the scope of delivery, but this is not necessary. This means that the sales contract may not have been executed yet, resulting in a transfer of ownership, and the buyer already acquires the economic right to dispose of the goods. This moment constitutes the delivery of goods, which is necessary for the application of the call -off warehouse procedure. Typically, this is the moment the buyer collects the goods from the warehouse; this is the sale of the goods in a manner that authorizes the buyer to dispose of the goods. A 12-month period is expected for delivery. This means that if, within these 12 months, the buyer acquires the actual right to dispose of the goods as an owner, the conditions for using the procedure will be met. However, until the material consequences resulting from the execution of the sales contract between the supplier and the buyer occur, the supplier remains the owner of the goods. The moment of transfer of legal title to the buyer may also be the moment of receipt of the goods by the buyer, but this is a separate category, irrelevant in the context of meeting the conditions for the call-off stock procedure.
The starting point for this 12-month period is the moment the goods are placed in the warehouse. In the case of goods designated only by type, a certain fictitiousness is assumed, in accordance with the FIFO (first in, first out) principle – what arrives at the warehouse first should be issued first.
3. CIRCUMSTANCES EXCLUDING THE POSSIBILITY OF USING THE PROCEDURE
If the above-mentioned conditions are not met, the transaction will be recognized as an intra-Community transfer of goods by the supplier. However, the moment of completion of the Common Transit Procedure occurs at different times, depending on the condition that was breached. For example, in the event of termination of the agreement, the transfer occurs at the time of termination. If the right to dispose of the goods as an owner is not transferred to the purchaser within 12 months, the intra-Community supply of goods occurs upon the expiry of that period (i.e., the day after).
It is not possible to transport goods to the territory of another EU Member State under the call-off stock procedure after they have been placed in the appropriate warehouse. The procedure is assumed to involve transporting goods from country A to a warehouse in country B, and transporting goods from that warehouse to country C is not covered by the procedure. In such a case, the call-off stock is also cancelled, and it is assumed that the intra-Community movement of goods occurred immediately before the goods were exported from the warehouse to a third country.
In the event of destruction, loss, or theft of goods already in the warehouse, the transaction must also be settled as an intra-Community supply of goods when these circumstances occur or are discovered. The cause of the event, whether it was the fault of the supplier, buyer, or anyone else, and regardless of the size or value of the lost goods, is irrelevant. However, minor losses not exceeding 5% of the value or quantity of the goods at the time they were placed in the warehouse are permissible if this is due to the actual properties of the goods – in this case, the nature of the transaction remains unchanged.
The buyer may be replaced by another foreign taxpayer. Such a replacement does not invalidate the call-off stock procedure, but certain conditions must be met. For example, an agreement between the supplier and the original buyer must provide the new buyer’s EU tax identification number in its records. The 12-month period remains unchanged and runs in the same manner as before. Likewise, appointing a pro forma buyer with the intended purpose of transferring this role to another entity is not a reason to invalidate the call-off stock procedure.
If, after delivery to the warehouse, the goods are returned to Poland without transferring the right to dispose of them as owners to the buyer, or if the remaining goods not collected by the buyer are returned to Poland, this does not invalidate the procedure and will not constitute grounds for establishing an intra-Community supply of goods. However, any re-transfer of the goods must be within the 12-month period and must be recorded in the supplier’s records.
4. REQUIREMENTS FOR RUNNING A CALL-OFF STOCK MAGAZINE
A consignment warehouse is a place where goods are stored on a consignment basis, an agreement between the seller and the warehouse owner, who undertakes to store and issue goods on their behalf. Polish law once stipulated that the warehouse must belong to the buyer of the goods, but now, following the implementation of an EU directive, this obligation is no longer in place – the owner can be a third party.
A person operating a consignment warehouse is required to notify the head of the tax office of their intention to conduct this type of business. They must submit a VAT CS form within 14 days of the first entry of goods into the warehouse. The declaration must include, among other things, the operator’s details, the identification numbers used by them in their business activities, and information allowing for the unambiguous identification of the goods, the recipient, and the warehouse. This procedure is regulated by Article 13f of the Polish VAT Act. If any information is missing, the head of the VAT Act requests supplementation within 14 days. The Polish Minister of Finance specifies a template for the notification by regulation; it must be submitted electronically. The notification may include an email address. The warehouse operator must inform the head of the tax office of any changes to this information.
A consignment warehouse can be used in various sectors. It is used in manufacturing operations, where manufacturers have constant access to components for production, such as electronics. The food industry also uses this solution. However, sometimes additional conditions must be met to store specific products or materials. For example, storing food in any warehouse, not just a consignment warehouse, requires meeting sanitary standards, including temperature and humidity parameters; the previously mentioned FIFO rule also applies. Before 2020, goods intended for commercial activities could not be stored in such a location; only for manufacturing or service activities. However, these goods can now be stored there as well.
5. ADVANTAGES AND DISADVANTAGES OF THE CALL-OFF STOCK PROCEDURE
Call-off stock procedure is implemented to simplify, reduce, and delay VAT payments. It clearly benefits buyers because it adapts to their individual needs – buyers have access to goods in close proximity and can use only what they actually need, when they need it, on a just -in- time basis. They do not need to estimate their needs in advance, and storage is not a problem for them, as the goods are always in the warehouse. Furthermore, this procedure is simplified compared to traditional intra-Community transactions and cheaper – the tax is paid only once. For suppliers, this can increase the competitiveness of their services or products and build good business relationships.
This procedure also has its drawbacks. Customers must bear the cost of storing the goods if the warehouse is not owned by either of them – the supplier is usually responsible. The supplier must also ensure proper recordkeeping and documentation of transactions. The supplier risks the buyer changing plans or withdrawing, and the buyer is dependent on a single supplier. The goods are stored, but they do not generate revenue; they are frozen until the buyer collects them.
Call-off stock warehouse procedure significantly simplifies intra-Community transport logistics, and thanks to changing EU law and the suspension of taxation, it becomes less financially demanding. However, care must be taken to properly comply with legal requirements and to adapt the procedure to the situation, as its use may not always be cost-effective or adequate to the risk.