Commentary

V3.213A Specific exceptions from the charge to tax under the deeming provisions—goods removed from the UK to another EU member state

Part V3 Supplies, acquisitions and imports

V3.213A Specific exceptions from the charge to tax under the deeming provisions—goods removed from the UK to another EU member state

V3.213A Specific exceptions from the charge to tax under the deeming provisions—goods removed from the UK to another EU member state

An order1 made under VATA 1994, s 5(3) provides that a removal is not a supply of goods in the following circumstances.

Installed goods

A removal involving the installation or assembly of the goods in another EU member state is not a supply of goods if the supply would be treated as taking place in another EU member state under UK legislation2.

The tribunal has dismissed a contention of HMRC that a removal of goods from the UK was a separate transaction from their subsequent installation in the course of a supply of repair services3.

Example

X Ltd (a manufacturer) produces packing machinery in the UK. The machinery is then disassembled and removed from the UK for installation in the customer's factory in Spain.

The place of supply is Spain4, and therefore the removal of the goods from the UK does not constitute a supply.

Direct sales (other than of new means of transport5) to non-taxable persons (distance sales))

A removal is not a supply of goods if6:

  1.  

    •     the goods are removed by or under the directions of the person ('P') who makes the supply

  2.  

    •     P is taxable in another EU member state

  3.  

    •     P is liable to account for VAT on the supply under the national legislation of another EU member state, and

  4.  

    •     where appropriate, P has notified to HMRC's option to be taxed in the place where the customer

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