Distance selling (until 31 December 2020)

Produced by Tolley
Distance selling (until 31 December 2020)

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

  • Distance selling (until 31 December 2020)
  • When to register in another EU member state
  • UK suppliers
  • Delivered goods
  • Record keeping
  • Registering for UK VAT under the distance selling regulations
  • UK businesses ― voluntary overseas VAT registration
  • EU distance selling thresholds

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This note applies to transactions whilst the Great Britain was a member of the EU and during the transition period that ended on 31 December 2020. For information on Northern Ireland see the Northern Ireland topic. Distance selling occurs when a VAT registered EU supplier sells ‘delivered goods’ to a private customer or organisation that is not VAT registered in another EU member state. The customer must purchase delivered goods from the overseas EU supplier in order to come within the scope of the rules explained below. These rules only apply to deliveries within the EU and were introduced to prevent distortion of competition. This could occur if suppliers established themselves in lower VAT rate jurisdictions in order to obtain a competitive advantage over a local supplier selling the same goods to local customers. Under the distance selling rules, an overseas supplier is required to VAT register in the EU member state where the goods are delivered once a specified trading threshold has been exceeded in that country.

One example of a business sector that often comes within the scope of the distance selling rules are businesses selling publications overseas or goods sold via the internet. Frequently, publishers circulate their books, newspapers or magazines outside the UK either to other European or worldwide distributors, or to individual subscription holders. Under the distance selling regulations, if the supplier is responsible for the delivery of goods to a person who is not a taxable person in another EU member state, such

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