If the customer arranges to collect them from you (an indirect export), you may be able to zero rate the sale as long as you meet certain zero rating conditions. This means complex customs procedures apply and the way VAT is accounted for also changes. This process offsets the need to pay or reclaim any VAT on the purchase. It will take only 2 minutes to fill in. If you are approaching annual sales of £250,000, you may receive a letter from HMRC alerting you that you may need to register for Instrat soon. 4. You may have to send goods to an EU country so you can do a job there. This post also assumes that you have basic knowledge of how VAT works. 4 Ensure eligible for export VAT exemption. If you only sell exempt services you are considered a VAT exempt business, but if you sell some exempt and some taxable goods or services you are considered a partially exempt business. This includes: chemicals; good; excise goods; livestock and foodstuffs. Check whether your client or customer is VAT registered. You (the supplier) must obtain and retain documentary evidence of the export. VAT is a tax on goods used in the UK and EU, so if goods are exported outside the UK and EU, you do not charge VAT. Note that the local rate of VAT is the rate where the digital service is received, not where the customer is based. Declare details of your sales on your VAT return. In fact, they write at the end of section 5.1 in VAT Notice 741A that: “The reverse charge is not a complicated accounting procedure. a general taxthat applies, in principle, to all commercial activities involving the production and distribution of goods and the provision of services. If your sale is zero-rated, your invoice should include the customer’s VAT number. You’ve accepted all cookies. (1) Subject to subsection (2), a supply of … Let’s break down the B2B and B2C scenarios in more detail. The laws governing VAT on Imports and Exports are Value Added Tax Act, 2013 (Act 870) and Value Added Tax Regulations, 2016 (L.I.2243). (If any VAT is due in the destination country, the recipient pays it there.) Where distance sales become more complex is when your sales reach the distance selling EU VAT threshold in a particular country. For EU sales you do not need to fill in a customs export declaration form. telecommunications, broadcasting or online services), you need to charge customers at their local rate of VAT and provide invoices that comply with the country’s VAT rules. If you use the National Export System, you’ll automatically get an electronic Goods Departed Message when the goods leave the UK, and this is acceptable official evidence. For example, if you run a small building company that is hired to work on a home restoration project by an ex-pat living in France, your invoice would need to include the total amount for your work + 20%. The total value of sales to EU countries should be recorded on your VAT return under ‘dispatches’ or ‘removals’. If you use courier or fast parcel services, you’ll normally be given an airways bill number for each shipment. In Germany, Helen sells €80,000 worth of t-shirts, but as the distance selling VAT threshold there is €100,000 she doesn’t have to register for VAT and can continue charging customers the UK rate of 20%. Goods delivered from the UK to a destination elsewhere in the EC are not exports for VAT purposes. For example, if you’re providing construction services, you won’t have to register for Intrastat. We’ll send you a link to a feedback form. ‘Exports’ describes sales to a country outside the UK or EU. Such … CPCs can be found on the, Proof of VAT or tax registration in your country of domiciliation, Proof of existence form the national company register, Custom declarations for goods exported to the EU (these currently only apply to exporting goods to the rest of the world). You can find out what you need to do to get your business export-ready post Brexit by using HMRC’s step-by-step guide. Exports are thus exempt from VAT, however you can still take a deduction for input VAT. For further information visit fscs.org.uk. All UK registered traders have to send lists of their EU sales to HMRC. As a general rule, exports of goods to VAT-registered EU customers and exports of goods and services to customers in the rest of the world can be charged at 0% for VAT purposes. An Economic Operator Registration and Identification (EORI) number prevents increased costs and delays when exporting goods to the rest of the world. Exports include Swedish companies’ sales from branches in other countries, sales of goods to export shops, and sales in Sweden to private individuals residing outside the EU, referred to as “tax-free sales.” VAT rules for countries and certain regions. If you use Royal Mail Parcel Force, they’ll give you a dispatch pack with accounting documents, a customs export declaration, and a receipt copy. The movable … A guide to VAT rules and rates on exports, Charging export VAT on services sold to EU countries, Charging export VAT on goods sold to EU countries, Essential checklists for exporting goods and services, how to avoid and rectify common VAT mistakes, everything you need to know about VAT partial exemption, New marking, labelling and marketing standards, exporting and declaring excise duty goods, how to choose an accountant for your small business, Amount of output tax in box 1 (VAT due on sales), Amount of input tax in box 4 (VAT reclaimed on purchases), Full value of the supply in box 6 (total value of sales), Full value of the supply in box 7 (total value of purchases), If you’re selling services to businesses, the reverse charge applies, If you’re selling services to consumers, VAT is charged at the UK rate for non-digital services and the local VAT rate for digital services, If you’re selling goods to VAT-registered customers, goods are zero-rated, If you’re selling goods to non-VAT registered customers, UK VAT is charged up to the point that sales exceed the distance selling EU VAT threshold, The commodity code of goods (also known as Tariff code, HS code or classification code). The government via GOV.UK’s VAT Notice 741A Section 5.1 suggests that “if you’re a UK supplier providing services in an EU member state you should check with your customer and that member state how their rules work.”. How much VAT you pay or whether you’re required to pay any at all depends on what you’re exporting and where you’re exporting to. Some EU countries have a simplified system for this but you’ll need to check with the VAT office in that country. The type of VAT and rate you charge customers abroad is determined by where they’re based, whether they’re VAT-registered, your goods or services and the value of your sales. You include the sale in your VAT Return for the period when the tax point takes place. This notice explains the conditions for zero rating VAT on an export of goods, that is, when the goods leave the EC. N.B. The UK will become a ‘third country’, which means businesses will need to go through the same processes as other non-EU countries when selling to the EU. If you have customers abroad, you may need to charge VAT on the goods and services you … But as long as the customer either operates the storage facility where the goods are held, or is at least aware that the goods have been delivered into storage for them, you can treat the goods in the normal way and, if all the usual conditions have been met, zero rate the supply. However, to benefit from the zero-rating, you need to prove that goods have been exported within three months of sending them or receiving full payment. But if you transfer your own goods to an EU country, whether to another part of your organisation or to put in storage, we treat this as if you’d made a supply in the UK and an acquisition in the destination country. For goods that are exported from business to business outside the EU, VAT is not charged. If the reverse charge does not apply, however, you may be liable to register for VAT in your customer’s local country. When exporting goods from the RSA to any export country, you have to distinguish between two types of exports, called direct and indirect export. Input VAT on Exports. Consignment stocks are goods you dispatch to an EU country where they’re held somewhere before you finally supply them to a customer in that country. You must also make sure the goods are exported, and you must get … If you plan to export goods to countries outside the EU you must get an Economic Operator Registration and Identification number (EORI) to deal with EU Customs authorities. If you have customers in several different countries, this would typically mean registering and filing VAT returns in every market you operate. For distance sales, you must charge VAT at UK rates in the normal way. This is acceptable evidence that the goods have gone abroad. If … 3 Check if you need an export licence. The most common examples are mail order or internet sales to private individuals in an EU country. Export VAT for non-EU countries. 1. – VAT (Value Added Tax) is referred to by different names across the world, for example USA = Sales Tax, France = TVA, Australia = GST. But if you’re providing construction services and supplying materials that you’re charging the customer for, you’ll need to register for Intrastat. Find answers to all your questions related to VAT on exports and VAT on imports and understand how these supplies behave under VAT. However, to be entitled to this relief, the exporter will need proof of the … 2. In practice, this is reflected on paper by shifting the normal rules of responsibility for charging VAT from the seller (you) to the buyer (your customer), making you void of any VAT responsibilities in regards to the sale. Don’t include personal or financial information like your National Insurance number or credit card details. You can apply for your EORI number on the GOV.UK website. Standard VAT rate is 15%. VAT is charged on the value of the goods plus excise duty. You can find an up-to-date list of EU member states on the European Union website. All content is available under the Open Government Licence v3.0, except where otherwise stated, Import, export and customs for businesses, Sales to someone who is VAT-registered in an EU country, Sales in an EU country to someone who is not VAT-registered, When you must register for VAT in EU countries, How to charge VAT to someone in an EU country, How to report EU sales where you’ve charged VAT, Temporary movements of goods to an EU country, Installing or assembling goods in an EU country, Send goods to an EU country for repair or processing, Goods you export temporarily or send on sale or return, Goods processed in the EU before they’re exported, Speeding up and simplifying the export process, VAT accounting and record keeping for exports, evidence that the goods have left the country, appointing an export agent in VAT Notice 703, Economic Operator Registration and Identification number (, Place of supply of services (VAT Notice 741A), Work out your place of supply of services for VAT rules, VAT rules for supplies of digital services to consumers in the EU, EU country codes, VAT numbers and enquiry letters for EC Sales Lists, Coronavirus (COVID-19): guidance and support, Transparency and freedom of information releases, the goods are sent out of the UK to an EU country, whoever you’re sending them to is VAT-registered in an EU country, you get their VAT registration number, including the 2 letter country code, and show it on your sales invoice, you dispatch the goods and get evidence of removal within 3 months, consignment notes showing the goods have been received in an EU country, a detailed description of the goods and their value, your normal VAT Return in box 6 and box 8, you do not have a place of business in the EU country where you’ve sent the goods, you’ve got a contract to carry out in that country and need the goods for that contract, you intend to return the goods to the UK when the contract is finished, you keep evidence that the goods have left the UK and returned, you keep a register of temporary movements to EU countries, keep a record of the temporary movement of goods, fill in the Intrastat Supplementary Declaration for the dispatch and return of the goods, the goods are delivered to the EU business, not sold to them, the EU business does not use the goods, it only processes them for export, proof of export and date of actual export, a bulk National Export System declaration by the shipping line, supported by individual Consignment Notes and Customs Declarations (, individual National Export System declarations that you make, official proof of export for VAT, either form C88 (, commercial transport evidence that the goods left the EU, copies of invoices and other sale documents. 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