The so-called consignment stock agreement is an
atypical contract, not directly governed by the Civil Code, but valid pursuant
to Article 1322 of the Civil Code, as it aims to realise interests worthy of
protection within the legal system. The subject matter of this contract is the
storage of goods at the customer’s premises, with ownership of the goods
remaining with the supplier until they are actually removed.
Difference from the contract of sale on approval
The Italian Civil Code provides for a similar
contract, namely the contract of sale on approval (Articles 1556–1558 CC). In
the latter contract, the purpose is to transfer to the recipient the power to
dispose of the goods, leaving it to them to choose whether to pay the price or
return the goods within the agreed time limit.
Difference from the ‘Call-off-Stock’ contract
The term ‘Call-off-Stock’ is often used
as a synonym for or in a way that overlaps with ‘Consignment Stock’. From a
technical point of view, however, it is appropriate to distinguish between the
contractual and commercial aspects and those relating to tax and EU law.
The term “call-off-stock” is a term typical of
intra-Community trade, of predominantly tax-related origin. The fundamental
difference lies in the fact that, in the case of call-off-stock, the end
customer is already known at the time of dispatch, whereas in the case of
consignment stock, they may be identified at a later stage.
The main characteristics of the three contracts
are summarised in a brief table
| Aspect |
Consignment Stock |
Consignment Contract |
Call-off Stock (EU) |
| Definition |
Storage of goods at the customer’s premises; ownership remains with the supplier until withdrawal |
Contract under which the recipient may sell or return the goods; payment is due only for the goods sold |
Simplified EU VAT regime for the transfer of goods to another Member State with a customer already identified |
| Legal basis |
Commercial practice + tax interpretation |
Italian Civil Code (Art. 1556–1558) |
EU Directive 2018/1910 + Art. 38-ter of Decree-Law 331/93 |
| Transfer of ownership |
Upon withdrawal from the warehouse |
Only upon resale to third parties (or failure to return the goods) |
Upon withdrawal from the warehouse |
| Relevant VAT moment |
Upon dispatch and withdrawal |
Upon sale or upon expiry of the return period (in any case within 12 months) |
Upon withdrawal (intra-Community supply) (in any case within 12 months) |
| Customer already identified |
Not mandatory |
Not mandatory |
Mandatory |
| Intrastat forms |
Yes (depending on the structure) |
Not relevant (if domestic transaction) |
Yes – simplification: no transfer to oneself (no foreign VAT registration if the requirements are met) |
| Obligation to obtain a VAT identification in Italy |
Usually yes |
Not relevant (if domestic transaction) |
No, if all requirements are met |
| Typical application |
Industrial supply chains, just-in-time |
Trade/distribution (high risk of unsold stock) |
Intra-Community B2B supplies with a defined customer, just-in-time |
Value Added Tax.
For VAT purposes, the following aspects are
relevant, depending on the type of contract:
- the physical transport of goods to the warehouse
- the subsequent collection of goods by the customer
The VAT assessment depends crucially on which
of the following scenarios applies:
- intra-Community transactions (between Italian taxable persons)
- intra-Community transactions without application of the simplified call-off-stock scheme
- intra-Community transactions with application of the simplified call-off-stock regime
- transactions involving goods stored in Italy or abroad
- transactions with domestic or foreign suppliers
- transactions involving storage in a tax or customs warehouse or in warehouses subject to specific regulations
Further information
on the topic Call-off-Stock can be found in our glossary article Call-off-Stock