Supplies of reverse charge services (general rule) (rules until 31 December 2020)

Produced by Tolley
Supplies of reverse charge services (general rule) (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 reverse charge services (general rule) (rules until 31 December 2020)
  • What are general rule services?
  • Transfers and assignments of copyright, patents, licences, trademarks and similar rights
  • Advertising services
  • Consultancy services
  • Banking, financial or insurance services
  • Supplies of staff
  • Exceptions
  • VAT treatment of reverse charge services
  • Practical considerations

This guidance note deals with the VAT treatment of services that come within the scope of the reverse charge mechanism within the EU. Most services are treated as reverse charge or ‘general rule’ services if they are supplied to relevant business customers located in another EU member state. However, there are exceptions to this general rule and the exceptions are summarised below and are covered in a number of different guidance notes linked to this document. This guidance note should be read in conjunction with the Where is the place of supply of services (rules until 31 December 2020)? guidance note in order to determine the correct place of supply and VAT treatment.

Please note that the services listed below are also outside the scope of UK VAT when supplied to any person (business and private) who is established outside of the EU.

What are general rule services?

Most services are treated as general rule (reverse charge) services and if the services are supplied to a relevant business person, the customer is required to account for any VAT due on the services, provided they are located in a different EU member state from the supplier. Supplies made to private and non-business customers are liable to VAT in the supplier’s member state. All services that are not included in one of the exceptions explained below are treated as reverse charge services within the EU.

The most common types of reverse charge services are explained below. However, it is important to note that since 2010, business to business (B2B) supplies of certain ‘excepted’ services are also liable to the reverse charge. More information can be found in ‘Exceptions’ below.

Transfers and assignments of copyright, patents, licences, trademarks and similar rights

This category includes any transfers and assignments of copyright, patents, licences, trademarks and similar rights. Similar rights usually include intellectual property rights which are capable of being legally enforced.

The following are typical examples of services included within the scope of

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