The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of the VAT treatment of cross border intermediary services. For information on the provision of agency services in the UK, see the Supply and consideration ― agents and principals guidance note.
The Flowchart ― intermediaries ― arranging a supply of services for EU resident customers provides a useful summary of the points raised below in this guidance note.
An intermediary is a third party that arranges or facilitates the making of supplies by other parties. The intermediary can act as a go-between for either the customer or the supplier. Intermediaries are often referred to as:
buying or selling agents
agents acting in their own name (undisclosed agents or commissionaires)
HMRC Notice 741A; VTAXPER35500; De Voil Indirect Tax Service V3.195
Intermediaries normally receive a commission for arranging the transaction between the supplier and the customer.
The place of supply of intermediary services follows the same place of supply rules as the underlying service that the intermediary is arranging.
Most intermediary services are covered by the general rule (reverse charge provisions) if they are supplied to a relevant business customer located in another EU member state (B2B transactions) or a customer located outside of the EU. However, there are exceptions to this rule, as explained below.
If the intermediary is acting on behalf of a private consumer / non-business customer, then the rules are more complex and these are also discussed below.
In order to determine the correct VAT treatment, the intermediary needs to determine whether the underlying supply is goods or services. If the underlying supply is services, the intermediary will need to ensure that he fully understands the nature and scope of the services supplied as the VAT treatment will depend upon the exact nature of the services being supplied. The general rules for supplies of goods and services are outlined below but are covered in detail in various guidance notes which are linked to this document.
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