Onward Supply Relief – importing goods that are delivered to another EU country

By Tolley
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The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Onward Supply Relief – importing goods that are delivered to another EU country
  • Onward Supply Relief
  • Union transit procedure

Under the normal import rules, VAT will be due when the goods are imported into an EU country. However, if the goods are imported from a non-EU country and they will be shipped to another EU country, the importer may be able to claim import VAT relief. This is known as Onward Supply Relief (OSR). Any VAT due on the goods will be paid in the EU country where the goods are transported.

HMRC Notice 702/7 2006/112/EC , Art 143; VATA 1994, s 47; SI 1995/2518, art 123 and 134; De Voil V3.337 (subscription sensitive); IMPS07000; IMPS07500

Businesses can elect to use either OSR or External community transit procedure.

Onward Supply Relief

Only businesses that regularly import goods can use OSR.

Under OSR, the goods will be put into free circulation in the country where they are first imported and any customs duties due on the goods will need to be paid. The importer will need to apply for OSR in order to avoid the requirement to pay any import VAT due when the goods arrive. One of the following conditions must be satisfied:

  • 1)UK VAT registered person imports them and makes an onward supply of those goods to an EU relevant business customer and the supply can be zero-rated under SI 1995/2518, art 134; or
  • 2)a UK VAT registered business, acting as an agent for a non-UK business that is not registered for VAT in the UK, when they import and supply those goods to a business customer located in another EU country and the supply can be zero-rated under SI 1995/2518, art 134. The agent must be acting in its own name

Please see guidance note Supplies of goods within the EU for information on what conditions must be

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