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.
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.
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 |
For VAT purposes, the following aspects are relevant, depending on the type of contract:
The VAT assessment depends crucially on which of the following scenarios applies:
Further information on the topic Call-off-Stock can be found in our glossary article Call-off-Stock