Supplies of freight transport services (rules until 31 December 2020)

Produced by Tolley
Supplies of freight transport services (rules until 31 December 2020)

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

  • Supplies of freight transport services (rules until 31 December 2020)
  • Determining the correct VAT treatment
  • Non-EU freight transport and imports and exports
  • Freight transport supplied within the EU
  • Current VAT treatment
  • Freight transport takes place wholly outside of the EU
  • Freight transport services to / from the Azores and Madeira
  • Subcontractors
  • Accounting for VAT
  • VAT reporting requirements
  • More...

Supplies of freight transport services (rules until 31 December 2020)

This note discusses the VAT treatment of freight transport and related services. If you are dealing with the VAT treatment of passenger transport services, please see the Supplies of passenger transport services (rules until 31 December 2020) guidance note.

Freight transportation occurs when a vehicle, ship or aircraft is provided together with a driver / crew for the carriage of goods. If a business hires a ship or aircraft without a driver / crew, then a means of transport is being supplied not freight transport services and the VAT treatment could be different, see the Hiring goods, e-services, telecommunication services and radio and broadcasting services (rules until 31 December 2020) guidance note for more information. Also if a business hires a vehicle, ship or aircraft and it is not used to transport goods, then freight transportation services are not being provided.

Freight includes the following types of goods:

  1. goods and other cargo

  2. mail

  3. documents

  4. unaccompanied vehicles

  5. vehicles transported on a ship and the charge levied by the carrier is the ‘driver accompanied rate’

Determining the correct VAT treatment

A business needs to have answers to the following questions in order to determine the correct VAT treatment of freight transport services:

  1. where does the freight transportation service physically take place (ie which countries are involved)?

  2. where does the customer belong? (see Where is the place of supply of services (rules until 31 December 2020)?)

  3. where applicable, is the customer a relevant business customer or private customer?

De Voil Indirect Tax Service V3.183

Different VAT rules will apply to the freight transport services depending on the answers to the questions above. The main VAT treatment of transportation services within the EU and between EU and non-EU countries has been provided below.

Non-EU freight transport and imports and exports

This section covers freight transport services between an EU and non-EU country (ie connected with the import or export of goods) and supplies that take place

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