Cross-border VAT

A supply of goods or services from one country to another will have a number of value added tax (VAT) implications.

Place of supply

The place where a supply takes place for VAT purposes is important because only supplies taking place in the UK are within the scope of UK VAT. Taxable supplies taking place outside the UK may be subject to VAT in another EU country, or outside the scope of VAT altogether.

For services, the general place of supply rule (where no exceptions apply) is:

•
if the recipient is a business that is, or should be, registered for VAT (known as business to business or B2B supplies), the country in which the recipient belongs, and
•
for other recipients (known as business to consumer or B2C supplies), the country in which the supplier belongs

For goods, the general rule is that if the supply does not involve their removal from or to the UK, then the place of supply will be:

•
the UK if the goods are in the UK, or
•
outside the UK if the goods are not in the UK

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