Buying goods from other EU vendors

Produced by Tolley
Buying goods from other EU vendors

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

  • Buying goods from other EU vendors
  • Background
  • What are acquisitions?
  • Goods liable to excise duty
  • European Research Infrastructure Consortium (ERIC)
  • Acquisition tax
  • How do businesses calculate the acquisition tax due?
  • Determining the value of the goods
  • Invoices received in foreign currency
  • When does a business need to account for acquisition tax?
  • More...

The EU has introduced a number of rules and regulations that are detailed in a number of pieces of EU legislation. However, the main rules are provided for in the Principal EC VAT Directive 2006/112/EC. EU member states are required to enact the EU Directives into local country legislation. Therefore, there is a defined set of rules regarding the VAT treatment of supplies of goods within the EU that must be followed by the EU member states in order to ensure consistency in the VAT treatment of intra-EU supplies of goods. It should be noted that as the EU Directives need to be enacted in local legislation, some EU member states have interpreted the rules differently which can cause difficulties when dealing with intra-EU transactions and overseas VAT registrations. However, generally the rules regarding buying goods from other EU vendors are straightforward and the main points are outlined below.

Background

The movement of goods between two EU member states is called an ‘intra-EU supply’ or an ‘intra-community dispatch’ for VAT purposes.

A list of the current EU member states can be found in EU member states ― VAT compliance information guidance note.

Please see the Importing goods from outside the EU guidance note for information on importing goods into the UK from non-EU countries.

If the business is involved in supplying goods to customers in other EU member states or moving its own goods to another EU member state then please see the Supplies of goods within the EU and EU ― specific transactions guidance notes for more information.

What are acquisitions?

An acquisition of goods from another EU member state takes place when the following conditions are satisfied:

  1. the supplier is VAT registered in the EU member state of departure (or the supplier is an intermediary in a triangulation transaction)

  2. the goods move from one EU member state to another

  3. the customer is VAT registered in the member state where the goods are delivered to, and

  4. the transaction

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