Guidance

VAT and the single market (Notice 725)

How to charge and account for VAT on the movements of goods within the single market.

Detail

This notice cancels and replaces Notice 725 (June 2013).

1. Overview

1.1 Information in this notice

This notice explains the way VAT is charged and accounted for on movements of goods within the EU single market and how businesses should account for VAT on goods they buy from other EU member states.

1.2 The changes

This notice has been revised to reflect the following changes.

Paragraph 16.19 - VAT registration numbers in other member states. Introduction of Croatia with effect from 1 July 2013 and changes to Ireland.

1.3 Who should read this notice

You should read this notice if you’re involved in the movement of goods between EU member states or make supplies to diplomatic missions, consulates, international organisations or NATO visiting forces.

1.4 Legal status of this notice

Some or all of paragraphs 4.3, 4.4, 4.5, 5.2, 8.5, 17.10 have force of law. Those parts affected are noted.

2. VAT in the EU

2.1 Definition of the single market

The single market is a term that has applied since 1 January 1993 to trading between member states. This covers intra-EU supplies of goods.

2.2 Goods arriving in the UK from other member states referred to as imports

With the introduction of the single market, goods coming into the UK from other member states are no longer called imports, but are referred to as acquisitions or arrivals. The term ‘import’ is only used for goods coming into the UK from countries outside the EU. For further information on imports, see Imports and VAT (Notice 702).

2.3 Goods leaving the UK to go to other member states referred to as exports

With the introduction of the single market, goods leaving the UK to go to other member states are no longer called exports, but are referred to as dispatches or removals. The term ‘export’ is only used for goods leaving the UK to go to countries outside the EU. For information about exports, see VAT on goods exported from the UK (Notice 703).

2.4 VAT territory of the single market

From 1 May 2004, the VAT territory of the EU is made up of 28 member states. The following table shows the member states and their territories which are included or excluded for VAT purposes. For further information about the territory of the EU for Intrastat purposes, see Notice 60: Intrastat general guide. From 1 January 2007 Bulgaria and Romania joined the EU.

Member state Including But excluding
Austria Jungholtz and Mittelberg  
Belgium    
Bulgaria    
Cyprus the British Sovereign Base Areas of Akrotiri and Dhekelia the United Nations buffer zone and the part of Cyprus to the north of the buffer zone, where the Republic of Cyprus does not exercise effective control
Croatia    
Czech Republic    
Denmark   the Faroe Islands, and Greenland
Estonia    
Finland   the Åland Islands
France Monaco Martinique, French Guiana,Guadeloupe, Reunion, and St Pierre and Miquelon
Germany   the island of Heligoland, and Büsingen
Greece   Mount Athos (also known as Agion Oros)
Hungary    
Ireland    
Italy   Campione d’Italia, the Italian Waters of Lake Lugano and Livigno
Latvia    
Lithuania    
Luxembourg    
Malta    
Netherlands   Antilles
Poland    
Portugal the Azores, and Madeira  
Romania    
Slovakia    
Slovenia    
Spain the Balearic Islands the Canary Islands, Ceuta, and Melilla
Sweden    
United Kingdom the Isle of Man the Channel Islands, and Gibraltar

2.5 Other areas not within the EU

Liechtenstein, the Vatican City, Andorra and San Marino are not within the EU for VAT purposes.

2.6 Status of the territories

You need to know which territories are included, or excluded from a member state because movement of goods between the UK and any of the:

  • countries, or their included territories, are treated as intra-EU supplies for VAT purposes
  • excluded territories are treated as imported or exported goods for VAT purposes

2.7 VAT collected on goods moving between member states

VAT on goods traded between member states is not collected at the frontier. The way VAT is accounted for on intra-EU supplies largely depends on whether the recipient of the supply is registered for VAT in the member state of arrival. For further information see sections 3 and 6.

For these purposes movements of goods between member states within the same legal entity (often referred to as a transfers of own goods) are treated as supplies (see section 9). Special rules apply in the case of natural gas and electricity, along with heat and cooling (see VAT Information Sheet 21/10 Place of supply of natural gas and electricity (also heat and cooling)).

2.8 VAT collected on supplies of excise goods

For information about the VAT treatment of supplies involving excise goods, see paragraph 15.4.

2.9 Trade statistics on goods moving between member states

The system for collecting statistics on the trade in goods between member states is known as Intrastat. All businesses carrying out trade with other member states must declare the totals of their sales and acquisitions on their VAT Return. Traders whose EU trade exceeds a legally set threshold have to complete additional statistical information called Supplementary Declarations. Statistics are compiled from the Supplementary Declarations and information supplied on the VAT Return. For further information on this, see section 18 and Notice 60: Intrastat general guide.

2.10 Member states VAT and Intrastat rules

The rules are the same, but there may be some small variations. If you want to check the position in another member state you should contact the relevant VAT authority (see paragraph 2.11).

2.11 VAT in other member states

Details of contact addresses and other useful information provided by the VAT authorities in other member states can be found on the European Commission website.

2.12 Equivalent of ‘Value Added Tax’ and ‘VAT’ in other member states

The equivalent in each member state is:

Member state VAT equivalent
Austria Mehrwertsteuer (Mwst) Umsatzsteuer (Umst)
Belgium Belasting over de Toegevoegde Waarde (BTW)Taxe sur la Valeur Ajoutée (TVA)
Bulgaria Данък Добавена Стойност or Данък Добавена Стойност
Cyprus Фόρος ΠροστιΘέμενης Αξίας (ΦΠΑ)
Croatia PDV Id. Broj (PDV-1D)
Czech Republic Daň z přidané hodnoty (DPH)
Denmark Omsaetningafgift
Estonia Käibemaks
Finland Arvonlisavero (ALV)
France Taxe sur la Valeur Ajoutée (TVA)
Germany Mehrwertsteuer (Mwst)
Umsatzsteuer (Umst)
Greece Φόρος Προστιθέμενης Αξίας (ΦΠΑ)
Hungary Általános Forgalmi Adó (ÁFA)
Ireland Value Added Tax
Italy Imposta sul valore Aggiunto (IVA)
Latvia Pievienotãs vértîbas nodoklis
Lithuania Pridetines vertes mokestis (PVM)
Luxembourg Taxe sur la Valeur Ajoutée (TVA)
Malta Value Added Tax
Netherlands Omzetbelasting (OB)
Belasting over de Toegevoegde Waarde (BTW)
Poland Podatek od towarów i uslug
Portugal Imposto sobre o Valor Acrescentado (IVA)
Romania Tăxa pe valoarea adăugată
Slovakia Daň z přidanej hodnoty (DPH)
Slovenia Davek na dodano vrednost (DDV)
Spain Impuesto sobre el Valor Anadidio (IVA)
Sweden Mervardeskatt (MOMS)

2.13 Normal rules for claiming input tax

The amount you can reclaim as input tax is subject to the ‘normal rules’. These include the evidence you must get and any additional partial exemption calculations you’re required to carry out. For further information about this see dealing with input tax in the VAT guide (Notice 700) and Notice 706: partial exemption.

3. Supplies to customers registered for VAT in another member state

3.1 Accounting for VAT

The normal VAT treatment of goods supplied between VAT-registered traders in different member states is as follows:

  • the supply in the member state of dispatch is zero-rated (how this applies in the UK is explained in more detail in section 4)
  • VAT is due on the acquisition of the goods in the member state of arrival and is accounted for by the customer on their VAT Return at the rate in force in that member state (how this applies in the UK is explained in more detail in section 7)

3.2 Special rules

There are various special rules that apply in particular circumstances. These are explained in the following sections of this notice:

Section Subject
9 Transfers of own goods
10 Temporary movements of goods
11 Installed or assembled goods
12 Intra-EU processing, repair, and so on
13 Triangulation
14 Supplies to diplomatic missions, consulates, international organisations and NATO visiting forces
15 Other intra-EU movements of goods

3.3 Supplies to the Isle of Man and the Channel Islands

Goods sent to the Isle of Man from the UK are treated as domestic supplies for VAT purposes. Consequently the rules described in this notice do not apply and VAT must be charged at the appropriate UK rate in the normal way. On the other hand, goods sent to the Channel Islands are treated as exports from the EU for VAT purposes. For further information about exports, see VAT Notice 703: export of goods from the UK.

3.4 Time of supply (tax point) for goods supplied to other member states

The tax point for a supply of goods to a VAT-registered customer in another member state is the earlier of either the:

  • 15th day of the month following the one in which you send the goods to your customer (or your customer takes them away)
  • date you issue a VAT invoice for the supply

3.5 Tax point for your supplies

You should use the tax point as the reference date for including the supplies on your VAT Return, EC Sales Lists and, normally, your Intrastat Supplementary Declarations.

But if it’s more convenient, you may use the calendar month during which the goods arrive in, or are dispatched from the UK for your Intrastat Supplementary Declaration, see Notice 60: Intrastat general guide.

3.6 Payments received in advance of an invoice or delivery

The receipt of a payment in these circumstances does not create a tax point for your intra-EU supply. But you must issue a VAT invoice to your customer for the amount paid to you (see paragraph 16.9) and the date of issue of the VAT invoice will be the tax point.

Where you issue a series of invoices relating to the same supply of goods, the time limit for getting valid evidence of removal begins from the date of the final invoice (see paragraph 4.4).

3.7 Reporting requirements

Type of movement VAT Return EC Sales List (EC SALES LIST) (see section 17) Supplementary Declaration (see section 18)
Goods supplied to VAT-registered customers in other member states where zero rating conditions in paragraph 4.3 are met. (Supplies may be zero-rated.) Boxes 6 and 8 - value of supply Yes - customer’s VAT number and value of supply Yes - as a dispatch (value of supply)
Goods supplied to customers in other member states where zero rating conditions in paragraph 4.3 are not met. (UK VAT charged at appropriate rate, but see paragraph 6.4 about distance selling.) Box 1 - output tax*
and 6 - value of supply

(*see paragraph 16.10 in cases where the time limits for removal and getting evidence are not met)
No Yes - as a dispatch. See paragraph 6.17 for distance sales and Notice 60: Intrastat general guide.

3.8 Goods that are lost, destroyed or stolen

As the supplier your liability to account for VAT depends on the circumstances.

Where goods are lost, destroyed or stolen and this occurs then
in the UK before you have supplied them (for example, whilst in storage awaiting delivery or collection) if there has been no supply, no VAT is due
while being transported in the UK by either you or your customer VAT is due unless you hold evidence of loss, destruction or theft (for example, an insurance claim or police investigation)
while being transported outside the UK by either you or your customer the goods may continue to be zero-rated (see paragraph 4.3) provided you have valid proof of removal of the goods from the UK and the VAT registration number of your customer. (Your customer may still be liable to account for acquisition tax. Also there may be additional VAT liabilities if the loss, destruction or theft occurs en route through a member state. In that event you should check on the position with the VAT authority in the member state concerned - see paragraph 2.11.)

4. Zero-rated supplies to VAT-registered customers in another member state

4.1 EC law covered by this section

Article 28C(A) of the EC Sixth Directive (77/388/EEC) states that member states shall exempt certain supplies subject to conditions laid down for the purpose of ensuring the correct and straightforward application of such exemptions (zero rating) and preventing any evasion, avoidance or abuse. The UK uses the term ‘zero rating’ rather than ‘exemption’ used in EC law to avoid confusion with the use of exemption elsewhere in UK law.

4.2 UK law on removals

The UK VAT law relating to the zero rating of removals of goods for VAT purposes can be found in the Value Added Tax Act 1994 sections 30(8), 30(10) and regulation 134 of the Value Added Tax Regulations 1995.

4.3 Zero-rated supply of goods

This paragraph has force of law.

A supply from the UK to a customer in another EU member state is liable to the zero rate where:

  • you get and show on your VAT sales invoice your customer’s EU VAT registration number, including the 2-letter country prefix code
  • the goods are sent or transported out of the UK to a destination in another EU member state
  • you get and keep valid commercial evidence that the goods have been removed from the UK within the time limits set out at paragraph 4.4

You must not zero rate a sale, even if the goods are subsequently removed to another member state, if you:

  • supply the goods to a UK VAT-registered customer (unless that customer is also registered for VAT in another member state, in such cases they must provide their EU VAT registration number and the goods must be removed to another EU member state)
  • deliver to, or allow the goods to be collected by, a UK customer at a UK address
  • allow the goods to be used in the UK in the period between supply and removal, except where specifically authorised to do so

Paragraph 4.9 covers the checks that you must undertake to make sure that your customer’s EU VAT number is valid.

4.4 Time limits for removal of goods and evidence of removal

This paragraph and bullets has force of law

In all cases the time limits for removing the goods and getting valid evidence of removal will begin from the time of supply. For goods removed to another EU member state the time limits are as follows:

  • 3 months (including supplies of goods involved in groupage or consolidation prior to removal)
  • 6 months for supplies of goods involved in processing or incorporation prior to removal

4.5 Goods removed to customers in other member states after processing or incorporation

This paragraph including the 11 bullet points has force of law

When you make a supply of goods to a VAT-registered customer in another member state, but have to deliver them to a third person in the UK who’s also making a taxable supply of goods or services to that customer, you can zero rate the supply provided:

  • you get and show on your VAT sales invoice your customer’s EU VAT registration number, including the 2-letter country prefix code
  • the goods are only being delivered and not supplied to the third person in the UK
  • no use is made of the goods other than for processing or incorporation into other goods for removal, and
  • you get and keep valid commercial evidence that the goods have been removed from the UK within the time limits set out at paragraph 4.4

and your records show:

  • the name, address and VAT number of the customer in the EC
  • the invoice number and date
  • the description, quantity and value of the goods
  • the name and address of the third person in the UK to whom the goods were delivered
  • the date by which the goods must be removed
  • proof of removal obtained from the person responsible for transporting the goods out of the UK, and
  • the date the goods were actually removed from the UK

Your records must be able to show that the goods you supplied have been processed or incorporated into the goods removed from the UK.

In cases where the third person is not in the UK but in another EU member state, the same conditions will generally apply to allow you to zero rate your supply.

4.6 If you cannot meet the conditions

(What to do if you cannot meet all the conditions in paragraphs 4.3, 4.4 or 4.5.)

If you cannot get and show a valid EU VAT registration number on your sales invoice you must charge and account for tax in the UK at the appropriate UK rate.

If the goods are not removed or you do not have the evidence of removal within the time limits you must account for VAT as described in paragraph 16.10. No VAT is due on goods which would normally be zero-rated when supplied in the UK. You may wish to consider taking a deposit for the VAT (see paragraph 5.5) if you have reason to doubt that the goods will be removed. Extra caution may be advisable if your customer:

  • is not previously known to you
  • arranges to collect and transport the goods, or their transport arrives without advance correspondence or notice
  • pays in cash
  • purchases types or quantities of goods inconsistent with their normal commercial practice

4.7 How to get your EU customer’s VAT registration number

You should carry out normal commercial checks such as bank and trade credit worthiness references before you start making supplies to an EU customer. As part of these checks you should ask your customer to supply you with their EU VAT number.You should get confirmation of their EU VAT registration number in writing. You should keep the letter or advice you’ve had from your customer for future reference because one of the conditions for zero rating your supply is that you hold a valid EU VAT number for your customer.

For further information on normal commercial checks, see Joint and several liability for unpaid VAT (Notice 726).

4.8 How to make sure your EU customers give you their VAT registration numbers

When you write to your customer, ask them to provide you with the number which has been allocated to them for intra-EU trade. In certain countries for example, Spain and Italy, businesses are required to register their VAT number for intra-EU use and if they do not do this, the number will show as invalid on the Europa website. If they do not supply you with their VAT number then you’re obliged to charge UK VAT on any supplies of goods.

If you’re supplying services and your customer cannot supply you with a VAT number then you must make sure you have sufficient evidence to show that your supply is to a business in order to zero rate the supply.

4.9 Checking the validity of an EU customer’s VAT registration number

You should check the validity of the number you have been given by making sure it follows the format at paragraph 16.19. Further checks on the validity of a customer’s number should be made using the Europa website.

All member states share these arrangements and businesses in other member states can verify a UK VAT registration number in the same way.

When making an enquiry on the Europa website you must identify yourself by entering your own VAT registration number and print out a record of the date and time that the enquiry was made and the result of the enquiry.

If it later turns out that the customer’s number was invalid, for example, the tax authorities database was not up to date, you’ll be able to rely on the validation record as one element to demonstrate your good faith as a compliant business and, in the UK, to justify why you should not be held jointly and severally liable for any VAT fraud and revenue losses which occur.

You must also regularly check your EU customer’s VAT registration number to make sure that the details are still valid and that the number has not been recently deregistered.

Alternatively you can contact the VAT: general enquiries helpline to validate your customer’s VAT registration number and to verify that the name and address is correct.

4.10 If your customer’s VAT number turns out to be invalid

You do not have to account for VAT, but only if you have genuinely done everything you can to check the validity of the VAT number, can demonstrate you have done so, have taken heed of any indications that something might be wrong and have no other reason to suspect the VAT number is invalid.

4.11 The meaning of ‘reasonable steps’

HMRC does not expect you to go beyond what’s reasonable, but will be seeking to identify what actions you took to check the validity of your customer’s EU VAT registration number. This will focus on the due diligence checks you undertook and, most importantly, the actions taken by you in response to the results of those checks.

We would consider ‘reasonable steps’ to be, you genuinely doing everything you can to check the integrity of the VAT registration number, being able to demonstrate you have done so and taking heed of any indications that the number may be invalid.

Some examples of not having taken ‘reasonable steps’ would be using a VAT number:

  • that does not conform to the published format for your customer’s member state as shown in paragraph 16.19
  • that you have not regularly checked using the Europa website or with HMRC
  • which you’ve already been told is invalid
  • which you know does not belong to your customer

4.12 If reasonable steps are not taken

VAT will be chargeable if we don’t consider you’ve taken reasonable steps. You’ll have to account for VAT at the appropriate UK rate.

4.13 Intra-EU supplies of freight containers

For information about the conditions for zero rating the sale of a container to a VAT-registered customer in another member state, see VAT Notice 703/1: supply of freight containers for export or removal from the UK.

5. Zero rating supplies to VAT-registered customers in another member state

5.1 Evidence of removal

A combination of these documents must be used to provide clear evidence that a supply has taken place, and the goods have been removed from the UK:

  • the customer’s order (including customer’s name, VAT number and delivery address for the goods)
  • inter-company correspondence
  • copy sales invoice (including a description of the goods, an invoice number and customer’s EU VAT number)
  • advice note
  • packing list
  • commercial transport documents from the carrier responsible for removing the goods from the UK, for example an International Consignment Note (CMR) fully completed by the consignor, the haulier and signed by receiving consignee
  • details of insurance or freight charges
  • bank statements as evidence of payment
  • receipted copy of the consignment note as evidence of receipt of goods abroad
  • any other documents relevant to the removal of the goods in question which you would normally get in the course of your intra-EU business

Photocopy certificates of shipment or other transport documents are not normally acceptable as evidence of removal unless authenticated with an original stamp and dated by an authorised official of the issuing office.

5.2 What to show on documents used as proof of removal

The following paragraph including bullet points has force of law

The documents you use as proof of removal must clearly identify the following:

  • the supplier
  • the consignor (where different from the supplier)
  • the customer
  • the goods
  • an accurate value
  • the mode of transport and route of movement of the goods, and
  • the EU destination

Vague descriptions of goods, quantities or values are not acceptable. For instance, ‘various electrical goods’ must not be used when the correct description is ‘2,000 mobile phones (make ABC and model number XYZ2000)’. An accurate value, for example, £50,000 must be shown and not excluded or replaced by a lower or higher amount.

If the evidence is found to be unsatisfactory you as the supplier could become liable for the VAT due.

5.3 Evidence of removal of goods to the Republic of Ireland across the Irish Land Boundary

The evidence you get must clearly show that the goods have left the UK. The types of documentary evidence required are explained in paragraphs 5.1 and 5.2. See paragraph 5.5 for advice when goods are collected by your customer. Depending on the circumstances of the removal, we recommend that you get the following types of evidence to meet the conditions for zero rating:

If the goods are Then commercial evidence should include
removed by road by an independent carrier a copy of the carrier’s invoice or consignment note, supported by evidence that the goods have been delivered to a destination in the Republic of Ireland (for example, a receipted copy of the consignment note)
removed by rail the consignor’s copy of the consignment note signed by the railway official accepting the goods for delivery to your customer
removed in your own transport a copy of the delivery note showing your customer’s name, address, EU VAT number and actual delivery address in the Republic of Ireland if different, and a signature of your customer, or their authorised representative, confirming receipt of the goods
collected by your customer or their authorised representative a written order completed by your customer, which shows their name, address, EU VAT number, the name of the authorised representative collecting the goods, the address in the Republic of Ireland where the goods are to be delivered, the vehicle registration number of the transport used, and a signature of your customer, or their authorised representative, confirming receipt of the goods

Where you sell a motor vehicle, which is collected by your customer or their representative, it may be difficult to get satisfactory evidence of removal from the UK. In these circumstances, a copy of the vehicle registration document issued by the authorities in the Republic of Ireland will normally provide satisfactory evidence of removal if supported by other evidence described above and in paragraph 5.1.

5.4 If you deliver the goods to your customer in another EU member state

In addition to the examples of acceptable documents relating to the sale listed in paragraph 5.1, travel tickets can also be used to demonstrate that an intra-EU journey took place for the purpose of removing the goods from the UK.

5.5 If your customer collects the goods or arranges for their collection and removal from the UK

If your VAT-registered EU customer is arranging removal of the goods from the UK it can be difficult for you as the supplier to get adequate proof of removal as the carrier is contracted to your EU customer. For this type of transaction the standard of evidence required to substantiate VAT zero rating is high.

Before zero rating the supply you must ascertain what evidence of removal of the goods from the UK will be provided. You should consider taking a deposit equivalent to the amount of VAT you would have to account for if you do not hold satisfactory evidence of the removal of the goods from the UK. The deposit can be refunded when you get evidence that proves the goods were removed within the appropriate time limits.

Evidence must show that the goods you supplied have left the UK. Copies of transport documents alone will not be sufficient. Information held must identify the date and route of the movement of goods and the mode of transport involved. It should include the following:

Item Description
1 Written order from your customer which shows their name, address and EU VAT number and the address where the goods are to be delivered
2 Copy sales invoice showing customer’s name, EU VAT number, a description of the goods and an invoice number
3 Date of departure of goods from your premises and from the UK
4 Name and address of the haulier collecting the goods
5 Registration number of the vehicle collecting the goods and the name and signature of the driver and, where the goods are to be taken out of the UK by a different haulier or vehicle, the name and address of that haulier, that vehicle registration number and a signature for the goods
6 Route, for example, Channel Tunnel, port of exit
7 Copy of travel tickets
8 Name of ferry or shipping company and date of sailing or airway number and airport
9 Trailer number (if applicable)
10 Full container number (if applicable)
11 Name and address for consolidation, groupage, or processing (if applicable)

5.6 How long to keep your evidence of removal

You must make sure that the proof of removal is:

  • kept for 6 years
  • made readily available so that any VAT assurance officer is able to substantiate the zero rating of your removals

5.7 Using an agent

You, as the supplier of the goods, or your customer can appoint a freight forwarder, shipping company, airline or other person to handle your intra-EU supplies and produce the necessary evidence of removal.

But you remain legally responsible for ensuring that the conditions for zero rating supplies of goods to other EU member states, as set out in paragraphs 4.3, 4.4 and 4.5, are met. This includes getting and holding evidence of removal of the goods from the UK.

5.8 Groupage or consolidation transactions

If you use a freight forwarder, consignments (often coming from several consignors) may be aggregated into one load, known as groupage or consolidation cargo. The freight forwarder must keep copies of the original bill of lading, sea waybill or air waybill, and all consignments in the load must be shown on the container or vehicle manifest.

You’ll be issued with a certificate of shipment by the freight forwarder, often supported by an authenticated photocopy of the original bill of lading, a sea waybill or a house air waybill.

Where such consignments are being removed, the forwarder may be shown as the consignor in the shipping documents.

(a) Certificate of shipment

Certificates of shipment are usually produced by packers and consolidators involved in road, rail and sea groupage consignments when they themselves receive only a single authenticated transport document from the carrier. It’s an important document, which should be sent to you as soon as the goods have been removed from the UK.

The certificate of shipment must be an original and authenticated by an official of the issuing company unless it’s computer produced, on a once-only basis, as a by-product of the issuing company’s accounting system. A properly completed certificate of shipment will help you to meet the evidential requirements described in paragraph 5.1.

(b) Information

Although the certificate of shipment can be in any format, it must be an original and will usually contain the following information:

  • the name and address of the issuing company
  • a unique reference number or issuer’s file reference
  • the name of the supplier of the goods (and VAT number if known)
  • the place, port or airport of loading
  • the place, port or airport of shipment
  • the name of the ship or the aircraft flight prefix and number
  • the date of sailing or flight
  • the customer’s name
  • the destination of the goods
  • a full description of the goods removed to another member state (including quantity, weight and value)
  • the number of packages
  • the supplier’s invoice number and date if known
  • the bill of lading or airway bill number (if applicable)
  • the identifying number of the vehicle, container or railway wagon

5.9 Postal services

Goods sent by post may be zero-rated if they’re sent directly to your customer registered for VAT in another EU member state, and you hold the necessary evidence of posting. The receipted forms described, plus the Parcelforce Worldwide statement of account or parcel manifest listing each parcel or multi-parcel, will provide evidence of removal.

Letter post or airmail

A fully completed certificate of posting form presented with the goods, and stamped by the Post Office. Acceptable forms are:

  • form C&E132 for single or multiple packages taken to the Post Office
  • form P326 available from the Post Office and used for single packages taken to the Post Office, or a Certificate of Posting for international mail only, or a Royal Mail Collection Manifest, available from a Royal Mail sales adviser, for use by customers using their Business Collections Service, where the Royal Mail collection driver signs the certificate

You can find further information on Parcelforce Worldwide international services.

Parcels

Parcelforce Worldwide operates a range of international parcel services. If you use any of these services you will be provided with:

  • a service specific barcoded label
  • a customs export declaration (for non-EU destinations only)
  • a copy of the Parcelforce Worldwide conditions of carriage
  • a printed receipt, which is your proof of shipment for all destinations

An individual barcode label must be affixed to every parcel. You do not need to complete the customs export declaration for goods being sent to another EU member state.

If you arrange for the parcel to be collected from your premises the collecting driver will sign your printed receipt. This is your proof of shipment for EU destinations.

If the parcel is taken to a Post Office, the counter clerk will provide you with a printed proof of shipment from the Post Office SmartPost system. This will show the overseas delivery address, date of dispatch and unique consignment number. You should keep this printed proof of shipment as your evidence of removal.

In addition to the individual parcel declarations described above, account customers of Parcelforce Worldwide have 2 further potential sources of information listing multiple parcel dispatches. These are:

  • Worldwide Dispatch manager (WDM) - online users can print a manifest which lists all dispatched parcels
  • a Statement of Account

All of the individual parcel declarations, plus either the manifest or the statement of account listing each dispatch will provide proof of removal for VAT purposes.

You can find further information on Parcelforce Worldwide international services.

5.10 Couriers and fast parcel services

Courier and fast parcel operators specialise in the shipment of goods to overseas destinations within guaranteed timescales.

(a) Operators who do not issue separate certificates of shipment

Most courier and fast parcel operators do not issue separate certificates of shipment. The invoice for moving goods from the UK, which bears details of the unique airway bill numbers for each shipment, represents normal commercial evidence of removal. In addition, many express companies are able to offer a track and trace service on their websites where the movement of goods can be traced through to the final destination. This information can be printed and also be used to confirm removal from the UK.

(b) Operators who use the system based upon a dispatch pack

A few companies still use a documentary system based upon a dispatch pack containing accounting data, a customs export declaration and receipt copies of the relevant house airway bill or consignment note. These packs are issued to customers to complete for each removal from the UK.

An export declaration does not need to be completed for goods being sent to another EU member state but a dispatch pack must be completed for each overseas address and consignee. The driver collecting the parcels will endorse the receipt copy and return it to the consignor. This, plus the statement of account listing each removal, will provide evidence of removal from the UK.

(c) Use of more than one courier or fast parcel company

Due to the complexities of the movement of goods within the courier or fast parcel environment, there is often more than one company involved in the handling and ultimate removal of the goods. Ultimately, you as the UK supplier may not be certain as to which courier or fast parcel company has removed the goods. If you’re aware that this may happen you will need to establish what proof of removal you will receive from the company to whom you give your goods. The proof available is described in (a) and (b).

(d) Overseas customer arranging the removal by courier

If your EU customer arranges for the goods to be removed by courier you should ascertain what proof of removal they will be providing to allow you to zero rate the supply. You should consider taking a deposit equivalent to the amount of VAT you would have to account for if you do not hold satisfactory evidence of the removal of the goods from the UK. The deposit can be refunded when you get evidence that proves the goods were removed within the appropriate time limits.

6. Supplies to customers (including private individuals) who are not registered for VAT

6.1 Accounting for VAT

For supplies to unregistered customers, or private individuals, VAT’s normally accounted for by the supplier as a domestic supply in the member state from which the goods are dispatched.

6.2 Tax point for supplies where UK VAT is chargeable

As a domestic supply, liable to UK VAT, the normal tax point rules apply. For further information about the normal rules, see the sections dealing with time of supply in the VAT guide (Notice 700).

6.3 Special arrangements for supplies of goods to private individuals or non-registered persons

Special arrangements apply to the following:

  • supplies to non-registered persons of new means of transport including boats, aircraft and motor vehicles (for further information, see VAT on new means of transport (Notice 728))
  • supplies of excise goods for private purposes (for further information see paragraph 15.4)
  • distance sales (for further information see paragraph 6.4 and VAT Notice 700/1: should I be registered for VAT?)
  • purchases by exempt bodies and non-taxable organisations (for further information about how this can make the purchaser liable to register for VAT, see VAT Notice 700/1: should I be registered for VAT?)

6.4 Distance selling

Distance selling occurs when a taxable person in one member state supplies and delivers goods to a customer in another member state who’s not registered or liable to be registered for VAT. These customers are known as non-taxable persons and will include private individuals, public bodies, charities and businesses which are not VAT-registered because their turnover is below the registration threshold or whose activities are entirely exempt. The most common examples of distance sales are goods supplied by mail order or ordered over the internet.

6.5 How to treat distance sales from the UK to other member states

(a) Accounting for VAT

If you’re registered for VAT in the UK and make distance sales to customers in another EU member state, you should charge UK VAT until:

  • the value of your supplies in a calendar year exceed the distance selling threshold in that country
  • you exercise the option described in paragraph 6.10

Once the value of your distance sales exceeds this threshold, you’ll be liable to register and account for VAT in that member state.

(b) Intrastat

If you trade above the UK Intrastat threshold you must report your distance sales to all non-taxable persons on your Intrastat Supplementary Declaration, even when your distance sales from the UK are below the distance selling threshold in the member state of arrival. For further information, see Notice 60: Intrastat general guide.

6.6 Distance selling threshold for each member state

Each member state is responsible for setting its own threshold, which is set in its own currency. The level of the threshold in a particular member state can be found on the website mentioned at paragraph 2.11 or by contacting the VAT authority in the member state concerned.

6.7 Distance sales of excise goods

If you make any distance sales of excise goods to another EU member state you’ll be required to register and account for VAT in that member state, irrespective of the value involved.

6.8 Records of distance sales to each member state

You must keep a separate record of your distance sales to each member state. This will allow you to monitor any liability to register for VAT there.

6.9 Appoint someone to act on your behalf in another member state

If you’re required to register in another member state, you may need to appoint someone to act on your behalf there. You should check this with the relevant VAT authority (see paragraph 2.11). Alternatively, you may be able to register personally and deal with your tax obligations yourself.

6.10 Opting to account for VAT on supplies in the member state to which the goods are sent

If your distance sales are below the threshold you may, nevertheless, opt to register and account for VAT in the member state of destination of the goods. But this does mean you’ll have to account for VAT on all supplies below the distance selling threshold in that member state.

6.11 How to exercise the option

If you decide to exercise the option you must do the following:

  • notify HMRC by writing to the appropriate written enquiries team
  • contact the VAT authority for the member state to which the goods are supplied, you’ll need to do this at least 30 days before making the first supply you intend to be covered by the option and must register from that date, you will also need to provide them with written evidence that you have informed HMRC in the UK)

You will then be subject to, and must comply with, the VAT rules in that member state.

6.12 UK VAT registration

Once you have taken up the option to account for VAT in another member state, you’ll no longer charge UK VAT.

6.13 When you can cancel the option

You’ll normally be required to remain registered in that member state for at least 2 calendar years from the date of the first supply following registration there. After this time, if the value of your supplies remains below the threshold and you decide to cancel your option, you must notify HMRC by writing to the appropriate written enquiries team. This should not be less than 30 days before the date of the first supply you intend to make after the cancellation.

6.14 What to do if you’re required to register for VAT in another member state

The registration requirements in each member state vary. If you’re required to register for VAT in another member state, you must notify the appropriate VAT authority (see paragraph 2.11). You’re responsible for ensuring that you register at the correct time and that you account for tax to the correct VAT authority.

6.15 Distance selling rules and group registrations

Group treatment is a facility which allows 2 or more corporate bodies controlled by the same person, to account for VAT as a single VAT registration. Although each VAT group member is, and remains, a legal entity in its own right, it’s treated as a single taxable person in the UK. But UK VAT groups are not recognised in other member states.

Group members must therefore individually monitor the value of their own distance sales to each member state. Where the value of sales in a calendar year exceeds a member state’s distance selling threshold, that group member will be liable to register for VAT there in its own right.

A group member is entitled to exercise the option described at paragraph 6.10.

6.16 What to do if you’re making distance sales to the UK

If you make distance sales to the UK, and the value of these sales in a calendar year exceeds the UK threshold of £70,000, you’ll be liable to register for VAT in the UK. You must then charge and account for UK VAT on your sales. But any supplies involving goods subject to Excise Duty are not subject to the threshold and you must register for VAT immediately you make a supply of this kind. You can also register in the UK under the option described in paragraph 6.10.

For more information about registering for VAT in the UK for distance sales, see VAT Notice 700/1: should I be registered for VAT?.

6.17 Reporting requirements

Type of movement VAT Return EC Sales List (see section 17) Supplementary Declaration (see section 18) Notes
Distance sales from UK below threshold in member state of arrival Box 1 - output tax.
Box 6 - value of supply
No Yes - as a dispatch (use VAT exclusive value). (See Notice 60: Intrastat general guide) Treated as a UK domestic supply for VAT purposes, but must still be declared on your Supplementary Declaration
Distance sales from UK on or above threshold in the member state of arrival (or where option to register there has been exercised - see paragraph 6.10) Boxes 6 and 8 - value of supply No Yes - as a dispatch (value of supply) Although VAT is chargeable on the supply in the member state of the arrival, the value must still be declared on your UK VAT Return and Supplementary Declaration
Distance sales to UK above UK distance selling threshold (or where option to register here has been exercised, see paragraph 6.16) Box 1 - output tax
Box 6 - value of supply
No Yes - as an arrival (value of supply) if the Intrastat threshold for arrivals has been exceeded. (See Notice 60 Intrastat General Guide for details of the current Intrastat threshold) Treated as a supply in UK and supplier required to register here
Distance sales to UK below UK distance selling threshold No No No No

7. UK acquisition of goods from another member state

7.1 The definition of an ‘acquisition’

An acquisition in the UK occurs where:

  • there’s an intra-EU movement of goods to the UK
  • the goods are received here by a VAT-registered trader
  • the supplier is registered for VAT in the member state of departure

In which case the recipient is required to account for VAT on the goods acquired in the UK.

7.2 Account for acquisition tax in the UK

You must account for any tax due on your VAT Return for the period in which the tax point occurs (see paragraph 7.3) and you may treat this as input tax on the same VAT Return subject to the normal rules (see paragraph 2.13).

7.3 Time of acquisition

The time of acquisition is the earlier of either the:

  • 15th day of the month following the one in which the goods were sent to you
  • date your supplier issued their invoice to you

7.4 Rate of VAT on acquisitions in the UK

Acquisitions are liable at the same rate as domestic supplies of identical goods in the UK. So, for example, no tax is due on acquisitions of goods which are currently zero-rated in the UK.

7.5 Account for acquisition tax if you make a part or full payment for the goods

Part or full payment for an intra-EU supply of goods does not create a tax point for the acquisition.

7.6 What to do if your supplier sends you an invoice for the amount you paid

You should account for the acquisition tax, provided the date of issue of the invoice is earlier than the 15th day of the month following the one in which the goods were sent to you.

7.7 Where acquisition tax is due

The VAT on an acquisition is always due in the member state where the goods are received. But there’s a ‘fallback’ provision that applies where the VAT registration number quoted to the supplier to secure zero rating has been issued in a different member state. In that event the acquisition tax must be accounted for in the member state of registration, but the customer also remains liable to account for acquisition VAT in the member state to which the goods have been sent.

7.8 Account for acquisition tax whenever you give your UK VAT number to an EU supplier

You’re liable to account for acquisition tax in the UK unless you can demonstrate that you have already accounted for acquisition VAT in the member state to which the goods were dispatched where this is different (see paragraph 7.7).

7.9 Refund of UK acquisition tax if VAT is also accounted for in the member state of arrival

You can get a refund of any UK acquisition tax accounted for in the circumstances described in paragraph 7.8. But you should only do this where you have not claimed, or have been unable to claim, full input tax credit for that acquisition.

7.10 Changes to your VAT registration

(a) Group registrations

If you’re part of a VAT group, you must contact HMRC.

It’s in your own interest to do this promptly, as it allows us to make sure that our records are kept up to date at all times. We can then reply correctly and without delay to any enquiries made about your registration number.

(b) Other registrations

If you acquire goods from other member states you will need to inform your EU suppliers of any changes to your VAT registration number. Otherwise they’ll have to charge you VAT on their supplies.

7.11 Reporting requirements

Type of movement VAT Return EC Sales List (see section 17) Supplementary Declaration (see section 18) Notes
Acquisitions of goods from VAT-registered suppliers in other EU member states Box 2 - acquisition VAT for goods positive-rated in UK
Box 4 - input tax subject to normal rules (see paragraph 2.13
Boxes 7 and 9 - value of acquisition
No Yes - as an arrival (value of supply) You must provide your EU supplier with your VAT number to quote on the sales invoice

8. Tax value of acquisitions

8.1 Calculating the amount of tax due on an acquisition

The amount of tax due on an acquisition is the tax value multiplied by the appropriate VAT rate.

8.2 Tax value of an acquisition

This is, usually, what you pay for the goods, it’s also called the ‘consideration’.

8.3 The meaning of ‘consideration’

Consideration is any form of payment in money or in kind, including anything which is itself a supply. The consideration includes any payment which you make to cover your supplier’s costs in making the supply, such as packing, transport or insurance for which they are responsible under their contract with you.

8.4 Establishing the tax value of an acquisition

The tax value of your acquisition can be established as follows:

Where Then the tax value of your acquisition is
the consideration is wholly in money the amount paid
the consideration is non-monetary, for example the supply is made in return for payment in goods or services, or is monetary and non-monetary the monetary equivalent of the consideration calculated by reference to the price, excluding VAT, which you would have to pay if the consideration were monetary
the consideration involves a discounted amount and you pay the discounted amount based on the discounted amount
the consideration includes the offer of a conditional discount which is dependent upon some future event, for example on condition that you buy more from your supplier, or make payment within a specified period of time based on the full amount paid - if you later earn the discount, the tax value is reduced and you can adjust the amount of tax accounted for (but you should only do this where you have not claimed, or have been unable to claim, full input tax credit for that acquisition)
there’s no consideration, for example a transfer of own goods (see section 9), or when goods are supplied without charge in either case, what it would cost you, or the person transferring the goods to you, to purchase the goods in question at the time of the acquisition

8.5 What to do if the value of your acquisition is in a foreign currency

Where the value of your acquisition is in a foreign currency, you should convert it to sterling as follows.

These paragraphs including (a) through to (c) have force of law

For VAT purposes, amounts of money must always be expressed in sterling. If you need to convert an amount from a foreign currency into sterling, you must do so on the following basis:

(a) Unless you have adopted one of the alternatives set out below, you must use the UK market selling rate at the time of the acquisition. The rates published in national newspapers will be acceptable as evidence of the rates at the relevant time.

(b) As an alternative you may use the period rate of exchange published by HMRC for customs purposes. The VAT Helpline can give details of particular period rates.

You may adopt this alternative in respect of all your acquisitions or in respect of all acquisitions of a particular class or description. If you opt in respect only of a particular class or description you should make a note in your records at the time of adoption of the class or description to which your option relates.

You do not need to notify HMRC in advance if you wish to adopt this alternative, but if you make such an option you cannot then change it without first getting HMRC agreement.

(c) You may apply in writing to HMRC for the use of a rate or of a method of determining a rate which you use for commercial purposes but which is not covered by (a) or (b) above. In considering whether to allow such applications HMRC will take into account whether the proposed rate or method is determined by reference to the UK currency market, whether it is objectively verifiable, and the frequency with which the applicant proposes to update it. Forward rates or methods deriving from forward rates are not acceptable.

Before 1 January 1993 you may have used a rate authorised in writing by HMRC under the concessionary arrangements for supplies which applied up to that date. By concession you may extend this to acquisitions without further notification, unless the rate you use wholly derives from currency markets other than in the UK. Your continued use of these concessionary rates is subject to review by HMRC.

This paragraph has force of law.

Whatever rate or method you adopt, the appropriate rate for any supply is the one current at the time of supply.

8.6 Include any Excise Duty in the tax value of an acquisition

For goods subject to Excise Duty or, in the case of EU accessionary states, Customs Duty or agricultural levy, the value of the acquisition is the value determined according to the principles outlined in this chapter plus the duty or levy arising from the removal to the UK.

9. Transfers of own goods between member states

9.1 Position if you transfer your own goods

A transfer of your own goods from one member state to another within the same legal entity, for example between branches of the same company, is deemed to be a supply of goods for VAT purposes.

9.2 Supply liable to VAT

The transfer of your own goods is liable to VAT in the same way as other intra-EU supplies of goods described in this notice.

9.3 Zero-rated supply

The supply may be zero-rated subject to the conditions in paragraph 4.3.

9.4 Acquisition tax

You’ll normally be liable to account for acquisition VAT in the member state to which the goods are transferred.

9.5 Register for VAT in the member state to which the goods are sent

You may need register for VAT in the member state to which the goods were dispatched in order to meet your obligations to account for acquisition tax and also to account for VAT if you subsequently supply the goods there. You’ll also be able to use that VAT registration number to support zero rating of the deemed supply in the UK (see paragraph 4.3).

9.6 What to do if you’re not registered in the member state to which the goods are sent

If you are not registered for VAT in the member state to which you transfer your own goods, you should treat the supply as a domestic supply (see paragraph 6.1). You must account for VAT on the transfer at the appropriate UK rate.

9.7 Register for VAT in the UK if you transfer your own goods from another member state

This will depend on whether you exceed the UK VAT registration thresholds. For further information about registering for VAT in the UK, see VAT Notice 700/1: should I be registered for VAT?.

9.8 Exceptions to the rule

There are some exceptions which are covered in sections 10 and 11.

9.9 Reporting requirements

Type of movement VAT Return EC Sales List (see section 17) Supplementary Declaration (see section 18) Notes
Transfers from the UK to other member states Boxes 6 and 8 - value based on cost of goods Yes - value based on cost of goods Yes - as a dispatch (value based on cost of goods) A deemed supply in the UK. It may be zero-rated subject to the conditions in paragraph 4.3
Transfers from other member states to the UK Box 2 - acquisition VAT for positive-rated goods in UK
Box 4 - input tax subject to normal rules (see paragraph 2.13)
Boxes 7 and 9 - value based on cost of goods
No Yes - as an arrival (value based on cost of goods) There’s an acquisition in the UK by the owner of the goods

10. Temporary movement of goods

10.1 Temporary movements of goods treated as a transfer of your own goods

The following temporary movements are not treated as deemed supplies of goods as described in section 9:

  • goods transferred temporarily to another member state in order to make a supply of services there provided all of the conditions at paragraph 10.2 are met
  • goods transferred to another member state for temporary use there provided all of the conditions at paragraph 10.4 are met

In each case no acquisition VAT is due in the member state to which the goods are transferred.

10.2 Conditions for the temporary movement of goods used to make a supply of services

You must meet all of the following conditions:

  1. You do not have a place of business in the member state to which the goods are temporarily transferred.
  2. You have a specific contract to fulfil.
  3. You intend to return the goods to the member state from which they were dispatched.

10.3 Circumstances this might apply

This can apply to your tools and equipment which you take to another member state to use there, for example to repair or service machinery. It also applies to goods that are loaned or leased to somebody in another member state.

10.4 Conditions for goods transferred for temporary use in another member state

You must meet both of the following conditions:

  • the goods would be eligible for temporary importation relief if they were imported from outside the EU
  • they’re to remain in the other member state for no longer than 2 years

10.5 Goods eligible for temporary import relief

For further information about this, see Notice 3001: customs special procedures for the Union Customs Code.

10.6 If circumstances change

The conditions described at paragraphs 10.2 or 10.4 may later cease to be met (for example, in the case of paragraph 10.2, where the goods are disposed of locally rather than returned to the UK or, in the case of paragraph 10.4, they are to remain in the other member state for more than 2 years). In that event the original movement should be treated belatedly as a deemed supply and acquisition, as described in section 9.

10.7 Evidence of removal and return to the UK

Although these transfers of your own goods are not treated as supplies for VAT purposes, you still need commercial evidence that the goods left the UK and have later returned. You must also maintain a register of temporary movements of goods, as described in paragraph 16.7.

10.8 Reporting requirements

Type of movement VAT Return EC Sales List (see section 17) Supplementary Declaration (see section 18) Notes
Goods sent from the UK used in making a supply of services in another member state that remain out of the UK for less than 2 years No No No Requirement to keep a register of goods moved temporarily (see paragraph 16.7)
Goods sent from the UK used in making a supply of services in another member state that remain out of the UK for more than 2 years No No Yes - as a dispatch (value based on cost of goods) Requirement to keep a register of goods moved temporarily (see paragraph 16.7)
Temporary transfer of goods from UK which would be eligible for temporary importation relief if sent from outside EU that remain out of the UK for less than 2 years No No No Requirement to keep a register of goods moved temporarily (see paragraph 16.7)

11. Installed or assembled goods

11.1 The meaning of ‘installed or assembled goods’

A supply of installed or assembled goods occurs when you supply goods and there’s a contractual obligation for you to install or assemble the goods for your customer. For example a supplier of studio recording equipment where the supply involves installation at the customer’s studio.

11.2 Place of supply of installed or assembled goods

The supply takes place where the installation or assembly of the goods is carried out.

11.3 Register for VAT for supplies of installed or assembled goods

You’re liable to register for VAT in any member state in which you’re supplying installed or assembled goods. But some member states operate a simplified procedure which permits the VAT-registered customer to account for the VAT due. You’re not required to register in a member state which has this facility.

11.4 Member states that operate the simplified procedure

Adoption of the simplified procedure is optional for member states. To find out if it’s available in a particular member state you should contact the VAT authority there (see paragraph 2.11).

11.5 Liability to acquisition tax

The movement of the goods (for example, the component parts) between member states as part of a supply of installed or assembled goods is not treated as a supply of own goods. Consequently there is no acquisition in the member state of installation or assembly.

11.6 Accounting for VAT on goods installed or assembled in the UK

If you supply goods from outside the UK to be installed or assembled here (the goods may be sourced from another member state or a third country) your supply is liable to VAT in the UK and you may be required to register here. But the UK operates the simplified procedure mentioned in paragraph 11.3. You may use that simplified procedure provided:

  • your customer is registered for VAT in the UK
  • you’re registered for VAT in another member state
  • you’re not required to be registered here for any other reason

11.7 The simplified procedure

Under the simplified procedure your UK customer is treated as acquiring the goods in the UK and must account for acquisition VAT on the full value of your supply. As a result you’re no longer liable to account for VAT.

11.8 Using the simplified procedure

If you’re a supplier in another member state and you wish to use these simplified arrangements you must do all of the following:

Step 1

Issue your customer with a VAT invoice.

Step 2

Issue that invoice within 15 days of the date on which your supply would otherwise have taken place under normal UK time of supply rules for goods. (For further information about this, see the sections dealing with time of supply in the VAT guide (Notice 700)). These include receipt of a payment, or completion of the installation or assembly.

Step 3

Tell us you intend to use this arrangement by writing to:

The Non Established Taxable Persons Unit (NETPU)
HMRC
Ruby House
8 Ruby Place
Aberdeen
AB10 1ZP

Include the following information:

  • your name, address and EU VAT registration number
  • the name, address and VAT registration number of your UK customer (you must make a separate notification for each customer no later than the date of issue of the first invoice to the customer concerned)
  • the date on which you began, or will begin, the installation or assembly of the goods

Step 4

Send a copy of the notification to your UK customer to advise them that you’re using the simplified arrangements and so they’re required to account for the VAT. You must send this no later than the date you issue the first invoice to your customer.

11.9 Notification for further supplies to the same customer

You will only have to make further notifications for any new UK customers.

11.10 Receive installed or assembled goods from a supplier using the simplified procedure

As the UK customer you should account for VAT on the supply to you as an acquisition by including the tax in box 2 of your VAT Return. You may also include this as input tax on the same VAT Return subject to the normal rules (see paragraph 2.13).

11.11 Reporting requirements

Type of movement VAT Return EC Sales List (see section 17) Supplementary Declaration (see section 18)
Goods sent from UK for installation or assembly in another member state Box 6 - value of supply
Box 8 - value based on cost of goods at time of dispatch
No Yes - as a dispatch (value based on cost of goods if known, otherwise open market value)
Goods sent from another member state for installation or assembly in UK where supplier registers for VAT in UK Box 1 - output tax
Box 6 - value of supply
No Yes - as an arrival (value based on cost of goods if known, otherwise open market value)
Goods installed or assembled in the UK where supplier elects to use simplification procedure. (Customer is responsible for reporting requirements) Box 2 - acquisition VAT
Box 4 - input tax (subject to normal rules see paragraph 2.13)
Boxes 7 and 9 - value of acquisition
No Yes - as an arrival (value based on cost of goods if known, otherwise open market value)

12. Movements of goods for process, repair, and so on

12.1 This section

This section outlines the VAT treatment of goods that are moved between member states in circumstances where some form of service is to be applied to those goods. The services can include things like processing, repair and valuation.

12.2 Goods sent from the UK for work to be carried out elsewhere in the EC

This can include goods sent to more than one service provider in the other member state or in different member states provided, in all cases, the goods are returned to the UK after the services have been completed. Where it applies there is no deemed supply of own goods as described in section 9.

You must:

Step 1

Record the movement of the goods in your temporary movements register (see paragraph 16.7).

Step 2

Hold commercial documentary evidence that the goods have been removed from the UK.

Step 3

Account for VAT on each of the supplies of services you have received as a reverse charge. (For further information about the reverse charge, as it applies to work carried out on goods, see VAT Notice 741A: place of supply of services.)

Step 4

Where applicable complete an Intrastat Supplementary Declaration (see paragraph 12.7). For more information about Intrastat, see Notice 60: Intrastat general guide.

12.3 Goods sent to the UK for work to be carried out

As the supplier of the service there is no requirement for you to account for VAT on the movement of the goods provided you return them to your customer when the work has been completed. Similarly, provided your customer is registered for VAT elsewhere within the EC, you’re not required to charge VAT on the supply of your services. Your customer will account for this as a reverse charge. For further information about the reverse charge, as it applies to work carried out on goods, see VAT Notice 741A: place of supply of services.

You must:

Step 1

Record the arrival and return of the goods in your temporary movements register (see paragraph 16.7).

Step 2

Hold commercial documentary evidence that the goods have been removed from the UK.

Step 3

Where applicable complete an Intrastat Supplementary Declaration (see paragraph 12.7). For more information about Intrastat, see Notice 60: Intrastat general guide.

12.4 Goods not returned to the member state of departure

These arrangements do not apply if, for any reason, the goods are not eventually returned to the member state from which they were originally sent. In that event they become subject to the normal intra-EU supply and acquisition rules and the owner of the goods may be liable to register for VAT in the member state concerned.

12.5 Work performed on goods in another member state before removal to the UK

This can occur where you buy goods from another member state and have work performed on them before they’re removed to the UK. The work may be performed by more than one supplier and they may be located in different member states. Whatever the position you’re required to:

Step 1

Account for acquisition VAT on the supply of the goods in the normal way.

Step 2

Account for VAT on each of the supplies of services you have received as a reverse charge. For more information about the reverse charge, as it applies to work carried out on goods, see VAT Notice 741A: place of supply of services.

Step 3

Where applicable complete an Intrastat Supplementary Declaration (see paragraph 12.7). For more information about Intrastat, see Notice 60: Intrastat general guide.

12.6 Work performed on goods before removal from the UK

This can occur if you make an intra-EU supply of goods and your customer has work performed on them before they leave the UK. In this situation you can continue to treat the supply under the normal rules described in section 3 provided you meet all the relevant conditions. You will therefore need to make sure that your customer provides you with evidence of removal of the goods from the UK once the work has been completed (see paragraph 4.5).

12.7 Reporting requirements

Repaired goods

Type of movement VAT Return EC Sales List (see section 17) Supplementary Declaration (see section 18) Notes
Goods sent to another member states for repair - owner’s reporting requirements No No No  
Goods received back in the UK by owner after repair in another member state - UK owner’s reporting requirements Box 1 - output tax*
Box 4 - input tax, subject to normal rules (see paragraph 2.13)
Box 6 - value of repair services
No No *Output tax accounted for on repair services as a reverse charge (see paragraph 12.2)
Goods for repair received in the UK from other member states - UK repairer’s reporting requirements No No No  
Repaired goods returned to customer in another member state - UK repairer’s reporting requirements Boxes 6 - value of repair service No No VAT on repair services accounted for by EU customer as a reverse charge (see paragraph 12.3)

Processed goods

Type of movement VAT Return EC Sales List (see section 17) Supplementary Declaration (see section 18)
Goods sent from UK for process in another member state - UK owner’s reporting requirements No No Yes - as a dispatch (value based on cost of goods)
Goods returned to UK from EU processor - UK owner’s reporting requirements. (Output tax accounted for on processor’s services as a reverse charge (see paragraph 12.2) Box 1 - output tax*
Box 4 - input tax subject to normal rules (see paragraph 2.13)
Box 6 - value of the processing services
No Yes - as an arrival (value based on cost of goods and cost of process)
Goods received for process in UK from EU customer - UK processor’s reporting requirements No No Yes - as an arrival (value based on cost of goods if known, otherwise open market value)
Goods returned after process in UK to EU customer - UK processor’s reporting requirements. (VAT on processing services accounted for by EU customer as a reverse charge (see paragraph 12.3) Box 6 - value of process No Yes - as a dispatch (value based on cost of goods, if known, otherwise, open market value and cost of process)

13. Triangulation

13.1 The meaning of ‘triangulation’

Triangulation is the term used to describe a chain of intra-EU supplies of goods involving 3 parties. But, instead of the goods physically passing from one to the other, they’re delivered directly from the first to the last party in the chain.

For example:

Example of triangulation. Fco (France) invoices UKco (UK) whilst simultaneously sending the goods to Gco (Germany). UKco (UK) then invoices Gco (Germany).
Triangulation

Here a UK company receives an order from a customer in Germany. To fulfil the order the UK supplier in turn orders goods from their own supplier in France. The goods are delivered from France to Germany.

13.2 The supply position

There’s a supply of goods by the and this means that
French company to the UK company the French company can zero rate the supply subject to the conditions described in paragraph 4.3
UK company to the German company the UK company is acquiring and supplying those goods in Germany and is liable to register for VAT there unless the simplified procedure described at paragraph 13.5 is used

13.3 Become involved in triangulation

You might become involved in triangulation as either the:

  • first supplier of the goods (the French company)
  • intermediate supplier (the UK company)
  • final customer (the German company)

13.4 Treatment of supplies for VAT purposes

The VAT treatment within the EU is normally as follows if you’re the:

  • first supplier, you may zero rate your supply of the goods subject to the conditions in paragraph 4.3
  • intermediate supplier, you may be liable to register for VAT in the member state to which the goods are delivered and account for VAT on the acquisition and on your supply
  • final customer, you may not need to do anything as you’re receiving a domestic supply (but see the simplified procedure described in paragraph 13.5)

13.5 Registration of the intermediate supplier

An intermediate supplier is not necessarily required to register in the member state to which the goods are delivered (seeparagraph 13.2) as there’s a simplified procedure which can be used in these circumstances.

13.6 When to use the simplified procedure

As the intermediate supplier you can use the simplified procedure if you:

  • are already registered for VAT within the EC
  • are not registered, or otherwise required to be registered, in the member state to which the goods are delivered
  • your customer is registered for VAT in the member state of delivery

13.7 Use of the simplified procedure as a UK intermediate supplier

To use the simplified procedure if you’re a UK intermediate supplier making supplies of goods to a customer in another member state, you must do all of the following:

Step 1

Use your UK VAT registration number to allow your EU supplier to zero rate the supply of goods in the member state from which the goods were dispatched.

Step 2

Issue a VAT invoice to your customer containing all the details normally required for intra-EU supplies.

Step 3

Include the supply on your EC Sales List (see section 17), quoting the VAT number of your customer in the member state of destination of the goods.

Step 4

Enter the total value of triangular supplies to each EU customer in that quarter on your EC Sales List on a single line separately from any other intra-EU supplies to that customer.

Step 5

Identify your triangular transactions by inserting the figure 2 in the indicator box (the notes on the reverse of the EC Sales List give further details).

Step 6

Omit details of triangular transactions on your UK VAT Return and Intrastat Supplementary Declaration (see section 18).

13.8 Submitting a UK EC Sales List if your intra-EU supplies only involve triangular contracts

EC Sales Lists (forms VAT101 and 101A) can be submitted:

  • using the EC Sales List Online Service (see paragraph 17.4)
  • by downloading the forms
  • by contacting the VAT helpline who will arrange for EC Sales Lists to be sent to you automatically

13.9 Use of the simplified procedure as an intermediate supplier in another member state

If you’re an intermediate supplier in another member state making supplies to a customer in the UK you can avoid having to register for VAT in the UK by using the simplified procedure. To do so you must do all of the following:

Step 1

Issue a VAT invoice to your customer containing all the details required by the member state in which you’re VAT-registered.

Step 2

Issue that invoice within 15 days of the date on which your supply would otherwise have taken place under normal UK tax point rules for supplies of goods (for further information about tax points, see the sections sealing with time of supply in the VAT guide (Notice 700)).

Step 3

Tell us you intend to use this arrangement. You should write to:

The Non Established Taxable Persons Unit (NETPU)
HMRC
Ruby House
8 Ruby Place
Aberdeen
AB10 1ZP

Include the following information:

  • your name, address and EU VAT registration number you used, or will use, to get zero rating of the initial supply of the goods
  • the name, address and VAT registration number of your UK customer (you must make a separate notification for each customer no later than the date of issue of the first invoice to the customer concerned)
  • the date the goods were first delivered, or are intended to be delivered, to your customer under these arrangements

Step 4

Send a copy of the notification to your UK customer to advise them that you’re using the simplified arrangements and so they are required to account for the VAT. You must send this no later than the date you issue the first invoice to your customer.

13.10 Make further notifications for the same customer

You won’t have to make further notifications, but you will have to make further notifications for any other UK customers.

13.11 Goods received from a supplier using the simplified procedure

As a UK customer whose supplier is using the simplified procedure you should do the following:

Step 1

On receipt of your copy of your supplier’s notification to HMRC (see paragraph 13.9 - step 4), account for VAT on the goods supplied to you under the simplified procedure as an acquisition (see section 7).

Step 2

Submit supplementary declarations for goods supplied to you under these simplified arrangements (see section 18).

13.12 Triangulation involving a non-EU intermediate supplier

The VAT treatment will depend on the VAT-registered status of the intermediate supplier. If the intermediate supplier is:

  • already registered for VAT within the EU, then the procedures described earlier in this section will apply
  • not registered for VAT within the EU, then the first supplier will be making a domestic supply (see section 6), but in acquiring or supplying the goods involved, the intermediate supplier may be required to register in either the member state of dispatch or arrival

13.13 Triangulation where the movement of the goods is to a place outside the EU

Triangulation in these circumstances is not an issue. The supplier may, regardless of the location of the other parties, treat the supply as an export (see VAT Notice 703: exports of goods from the UK).

13.14 Triangulation where the movement of goods is from a place outside the EU

The triangulation simplification arrangements do not apply in these circumstances and it may be necessary for the first supplier or the intermediary supplier to register for VAT in the member state where the supply takes place, depending on who imports the goods.

14. Supplies to privileged persons in other EU member states

14.1 Arrangements for diplomatic missions, consulates, international organisations and NATO visiting forces in other EU member states

Under international agreements, some people and bodies working in the international arena and hosted by other EU member states may make purchases free of VAT. This section explains when you may zero rate supplies under these agreements. The host government determines what bodies and persons qualify, and it may impose limitations. If your customer has any doubts about their status they should contact their host VAT authority for advice (see paragraph 2.11).

Qualifying bodies and persons have a duty to abide by the law and agreements underlying their entitlement to make purchases free of VAT (including limitations imposed by their host member state), and to observe policies controlling abuse of those entitlements.

These arrangements apply only to supplies that would otherwise be subject to UK VAT at a positive rate. They do not apply to new means of transport. For further information about the zero rating of new means of transport, see VAT Notice 728: new means of transport.

14.2 The meaning of an ‘international organisation’

For the purposes of this relief, ‘international organisation’ means an organisation established by a treaty between sovereign governments. An organisation formed by agreement between non-governmental bodies such as limited companies or charities is not an international organisation, nor is a body set up by a single state or government, for example a government department. Well known international organisations include the institutions of the EU, the United Nations and its various subsidiary organisations, and the NATO.

14.3 The meaning of a ‘NATO visiting force’

For the purposes of this relief, a ‘NATO visiting force’ means an armed force contingent that:

  • belongs to a NATO member state
  • is stationed in an EU member state
  • does not belong to the state in which it’s stationed

14.4 Zero rating supplies of goods

A supply qualifies for zero rating if it satisfies the following conditions:

Step 1

You must receive a certificate of entitlement (see paragraph 14.6).

Step 2

The goods must be for the official use of:

  • an embassy
  • a high commission
  • a consulate
  • an international organisation
  • a NATO visiting force
  • a British armed force contingent based in Cyprus, or for the personal use of a member of staff of one of these bodies

‘Official use’ includes goods the body receives for distribution (including sale) to its members and their accompanying dependants. ‘Personal use’ includes distributing goods to their accompanying dependants for no reward.

Step 3

You, or a forwarder acting on your behalf, must remove the goods to an official address of the embassy, high commission, consulate, international organisation or force in another EU member state or in one of the Sovereign Base Areas in Cyprus. You may consign goods to the post or to a courier or fast parcel service, including the British Forces Post Office (BFPO). If your customer is a British embassy or high commission in another member state, you may consign goods to the Foreign and Commonwealth Office for delivery through diplomatic channels.

Step 4

You must get and keep proof of the removal of the goods from the UK to the customer’s address in the host country. Proof of posting is sufficient.

Step 5

If the supply is for a contingent of British forces in Cyprus or its staff, or for a NATO visiting force in Germany or its staff, the order must be placed by an Official Procurement Agency for the force, such as the NAAFI or a regimental purchasing officer.

14.5 Zero-rated supplies of services

A supply of services qualifies for zero rating if it satisfies the following conditions:

Step 1

You must receive a certificate of entitlement (see paragraph 14.6).

Step 2

The supply of services must be made to an international organisation, a NATO visiting force, or a British force in Cyprus, for the official use of the force or organisation.

Step 3

The person placing the order must be based in an office of the force or international organisation in an EU member state other than the UK.

Step 4

A supply of services to British forces must in addition satisfy the following conditions:

  • the service must consist of training, software development, a supply of staff, or goods forwarding
  • for training, the trainees must all be members of a British contingent based in an EU member state other than the UK, or members of British forces Cyprus
  • for software development, the software must be for the use of the force, and not for use in the UK
  • for a supply of staff, the staff must work exclusively for the force in the visiting force’s host country or in a Sovereign Base Area in Cyprus
  • if the service is goods forwarding, the goods must all be forwarded to or from the force’s premises in the other member state or in a Sovereign Base Area in Cyprus

14.6 Certificate of entitlement

You must get and keep documentation uniquely identifying the supply and claiming entitlement under Article 15(10) of EC Council Directive 77/388/EEC. This must be either:

  • a certificate bearing the original signature of the head or acting head of the embassy, high commission, consulate, visiting force contingent or international organisation, with evidence of the qualifying status of the signatory
  • any other form of certificate specified by their host government

Exceptionally in the case of a supply for the British force in Cyprus or its members, or for a visiting force in Germany or its members, you must get and keep a certificate from the person placing the order uniquely identifying the supply for which relief is claimed, and claiming entitlement as follows:

  • for British forces in Cyprus - under Article 14(1)(g) of EC Council Directive 77/388/EEC
  • for a visiting force in Germany - under Article 15(10) of EC Council Directive 77/388/EEC

14.7 Whether to include these supplies on your EC Sales Lists

Entries on EC Sales Lists are not required for these supplies.

14.8 Whether to include these supplies on your Supplementary Declarations

Certain supplies of goods under these arrangements must be included on your Supplementary Declarations. For further information see Notice 60: Intrastat general guide.

14.9 Whether the supplies count towards distance selling thresholds

In general, these transactions are not regarded as distance sales and do not count towards distance selling thresholds. Exceptionally supplies to Germany, do count towards your distance selling threshold in that country.

14.10 Further advice

If you, as a supplier, receive a certificate claiming VAT relief for any goods or services that fail the requirements of this notice, or if you have any doubts about the documentation you receive, contact the VAT helpline for advice.

15. Other Intra-EU movements of goods

15.1 This section

This section gives information about:

Subject Location
Call-off stocks paragraph 15.2
Consignment stocks paragraph 15.3
Excise goods paragraph 15.4
VAT treatment of goods removed from a warehouse to a place outside the UK paragraph 15.5
Goods supplied on sale or return, or similar terms paragraph 15.6
Samples paragraph 15.7
Goods sent for testing paragraph 15.8

15.2 Call-off stocks

Call-off stocks are goods transferred by the supplier between member states, to be held for an individual customer in the member state of arrival pending ‘call-off’ for use by the customer as they need them. In the meantime title and ownership of the goods remains with the supplier.

This only applies in cases where the goods are destined for a single identified customer either:

  • for consumption within their business (for example, as part of a manufacturing process)
  • to make onward supplies to their own customers

Movements of goods to maintain the suppliers own stocks in another member state, or where they are available for call-off by more than one customer, are to be dealt with as consignment stocks (see paragraph 15.3).

(a) Whether the location of storage facilities affect treatment as call-off stocks

The goods will normally be stored by the supplier at the customers premises. But goods delivered to storage facilities operated by the supplier can still be treated as call-off goods provided the conditions are met and the customer is aware of the details of deliveries into storage. Otherwise the goods should be treated as consignment stocks (see paragraph 15.3)

(b) VAT treatment of call-off stocks

If you:

  • send goods from the UK to be held as call-off stock in another member state, then the normal intra-EU rules apply so that your supply is treated as taking place in the UK and may be zero-rated subject to the conditions described in paragraph 4.3
  • receive goods held in the UK as call-off stock by a supplier in another member state, then the normal intra-EU rules apply and you should account for acquisition tax as described in section 7

(c) Reporting requirements

Type of movement VAT Return EC Sales List (see section 17) Supplementary Declaration (see section 18) Notes
Goods sent as call-off stocks from the UK to another member state Boxes 6 and 8 - value based on cost of goods Yes - value based on cost of goods Yes - as a dispatch, (value based on cost of goods) The supply may be zero-rated
Goods received in the UK as call-off stocks Box 2 - acquisition VAT for positive-rated goods in UK.
Box 4 - input tax subject to normal rules.
Boxes 7 and 9 - value based on cost of goods
No Yes - as an arrival (value based on cost of goods) There is an acquisition by the UK customer

15.3 Consignment stocks

Consignment stocks are goods you transfer between member states to meet future supplies to be made by you, or on your behalf, in the member state of arrival. The important feature is that the movement of the goods occurs before a customer has been found for them. This can include goods not meeting the conditions necessary for treatment as call-off stocks (see paragraph 15.2).

Consignment stocks are treated as a transfer of own goods for VAT accounting and reporting purposes (see section 9).

15.4 Movements of excise goods between member states

All excisable goods must travel with an accompanying document. There are 2 types of accompanying document:

  • an Administrative Accompanying Document (AAD)
  • a Simplified Administrative Accompanying Document (SAAD)

Examples of the circumstances in which they are used are as follows.

If the movement of goods is between warehouses and then
they’re moving under authorised duty suspension arrangements (for example an excise warehouse) the consignor must complete an AAD - there must also be a financial guarantee to cover all Excise Duty liabilities during the movement - the consignee must complete a certificate of receipt for the goods on the reverse of copy 3 of the AAD and return it to the consignor
UK Excise Duty has already been paid the goods should travel with SAAD- the customer must also provide evidence that the Excise Duty has been paid in the member state of destination or secured to the satisfaction of the VAT authorities there, before the supplier dispatches the goods

For further information on the use of AADs and SAADs, see Excise Notice 197: receipt into and removal from an excise warehouse of excise goods.

(a) Supply of excise goods to persons not registered for VAT

You can zero rate an intra-EU supply of excise goods to persons not registered for VAT in another member state, provided all the following 3 conditions are met:

  1. The goods are not for private use.
  2. They’re removed or dispatched from the UK to a destination in another member state by or on behalf of the customer.
  3. Within 15 days of the end of the month in which they’re moved, you must get (and keep) a receipted copy 3 of the AAD, (see paragraph 15.4). This must be certified by the consignee or VAT authority in the member state of destination. The movement of goods must be completed as soon as possible and the certificate of receipt for the goods must be issued within 4 months of the time of supply.

(b) Payment of Excise Duty and VAT in the member state of arrival

If the conditions in sub-paragraph (a) are not met, the customer is liable for the Excise Duty and VAT. If duty suspended goods go missing in transit then the person who supplied the movement guarantee will be liable for the duty, along with any person who may be jointly and severally liable.

(c) VAT treatment for excise goods supplied to a VAT-registered customer

Excise goods sold to somebody who’s registered for VAT in another member state are treated in the same way as any other type of goods.

(d) Excise goods supplied for private purposes

Excise goods supplied for private purposes where you arrange delivery to a customer in another member state are covered by the special VAT arrangements for distance selling (see paragraph 6.4). Also the vendor must pay the duty in the member state of destination at the time the goods are delivered. You may therefore have to register for excise purposes with the VAT authorities in the member state concerned (see paragraph 2.11). In the UK, people receiving goods under Distance Selling arrangements, must appoint a Duty Representative to account for UK Excise Duty, before the goods are dispatched.

15.5 VAT treatment of goods removed from a warehouse to a place outside the UK

If goods are removed from a tax warehouse in the UK to a destination outside the UK, you will not have to pay the VAT normally due on removal to home use. In such circumstances, either the person making the final supply in warehouse or the person removing the goods can zero rate that transaction provided certain conditions are met. Liability to meet the zero rating conditions must be clearly established before the goods are delivered to avoid any doubt as to where responsibility lies.

The following table provides an overview of the VAT implications when goods are removed to a place outside the UK:

Where goods are removed from warehouse to The VAT treatment
a country outside the EU Any VAT which would be due on removal to UK home use is not payable - supplies of goods removed from the UK may be zero-rated as exports subject to meeting the conditions in VAT Notice 703: export of goods from the UK.
an EC Sales List is not required
a VAT-registered customer in another member state You may zero rate a supply of goods to a customer who’s VAT-registered in another EU country where the goods are moving outside the warehousing system
an EC Sales List and an entry in box 8 of the VAT Return is required
a tax warehouse in another EU member state You may disregard, for UK VAT purposes, any supply of the goods provided you’re removing them directly to a registered tax warehouse in another EU country
an EC Sales List and an entry in box 8 of the VAT Return is required

15.6 Goods sent on sale or return, approval or similar terms

These are goods which are not supplied until they’re adopted by the customer. Adoption occurs when the customer indicates that they’re going to keep the goods. Until then the customer has an unqualified right to return them at any time, unless there’s an agreed time limit after which the goods are to be automatically treated as accepted.

(a) Accounting for VAT

If you send goods:

  • from the UK on sale or return, approval or similar terms to somebody in another member state, then you should treat this as a transfer of own goods (see section 9), this means that:
    • you’ll be making an acquisition of the goods in the member state to which the goods are sent
    • you’ll be making a supply of those goods in that member state if, and when, the goods are eventually adopted by your customer
    • you may need to register there to account for any VAT due on the acquisition and supply of the goods
  • to the UK from another member state on sale or return, approval or similar terms, then you should treat this as a transfer of own goods (see section 9), this means that:
    • you’ll be making an acquisition of the goods in the UK
    • a supply of those goods in the UK if, and when, the goods are eventually adopted by your customer
    • you’ll also be liable to register for VAT in the UK, to account for any VAT due on the acquisition and supply of the goods

(b) Reporting requirements

Type of movement VAT Return EC Sales List (see section 17) Supplementary Declaration (see section 18)  
Goods sent from UK to another member state Boxes 6 and 8 - value based on cost of goods Yes - value based on cost of goods Yes - as a dispatch (value based on cost of goods) See section 9 (transfers of own goods) - this assumes sender of goods is registered for VAT in member state of arrival
Goods sent to UK from another member state Box 2 - acquisition VAT for positive-rated goods in UK
Box 4 - input tax subject to normal rules
Boxes 7 and 9 - value based on cost of goods
No Yes as an arrival (value based on cost of goods) There’s an acquisition in the UK by the owner of the goods - this assumes sender of goods is registered for VAT in the UK

15.7 Samples

Movements of goods that qualify as samples are disregarded for intra-EU supply and acquisition purposes. Details of the conditions that must be met to treat something as a sample can be found in the VAT guide (Notice 700).

Reporting requirements

Type of movement VAT Return EC Sales List (see section 17) Supplementary Declaration (see section 18)  
Samples sent to, or received from, another member state No No No (when the goods are supplied free of charge)  

15.8 Goods sent for testing

Goods sent to, or received from, another member state for testing are disregarded provided that:

  • ownership remains unchanged
  • the goods are either returned to the member state of departure or are destroyed

Reporting requirements

Type of movement VAT Return EC Sales List (see section 17) Supplementary Declaration (see section 18) Notes
Goods sent to, or received from, another member states for testing No No No (unless it is known at time of dispatch that they will be tested to destruction - if so value based on cost of goods)  

16. Accounting and record keeping

16.1 Completion of other returns in addition to your VAT Return

In addition to the VAT Return you may have to complete the following:

  • an EC Sales List - listing goods that you have sent to VAT-registered businesses in other member states, and services you have supplied that are subject to the reverse charge procedure in your customer’s member state
  • an Intrastat Supplementary Declaration, which is completed for supplies of goods by larger businesses

For further information see section 17 and 18.

16.2 Completion of VAT Returns, EC Sales Lists and Supplementary Declaration

The reporting requirements for the various types of intra-EU transaction covered by this notice are described in each section.

16.3 Boxes to complete on your VAT Return to account for supplies and acquisitions of goods

On the VAT Return (form VAT100) there are a number of boxes to gather information on the value of goods sold to, or bought from, other member states and 2 boxes for VAT due on acquisitions. These are:

Box number Description
2 Total VAT due on EU acquisitions in the period
4 Amount of VAT deductible on any business purchase including acquisitions of goods and related costs from other EU member states (subject to the normal input tax rules)
6 Total value of all your business sales including supplies to other EU member states
7 Total value of purchases including acquisitions from VAT-registered suppliers in other EU member states
8 Total value of supplies of goods and directly related costs (such as freight and insurance charges) to member states in the period (excluding VAT). The value you enter in box 8, should be the total of all intra-EU supplies of goods made in that reporting period (excluding VAT) and not just the value of payments received. (Figures entered in this box must also be included in the box 6 total.)
9 Total value of acquisitions and directly related costs (such as freight and insurance charges) from member states in the period (excluding VAT). (Figures entered in this box must also be included in the box 7 total.)

For further information about form VAT 100, see VAT Notice 700/12: how to fill in and submit your VAT Return.

16.4 How to complete box 8 of the VAT Return if you account for VAT using the cash accounting scheme

The value you enter in box 8, should be the total of all intra-EU supplies of goods made in that reporting period (excluding VAT) and not the value of payments received in that period. The total value of entries on your EC Sales List should agree with the value entered in box 8 of your VAT Return (see VAT Notice 731: cash accounting).

16.5 Which VAT accounting period to account for VAT on your acquisitions

You must account for any VAT due on your VAT Return for the period in which the tax becomes due. This is the period when the time of acquisition (tax point) occurs. Paragraph 7.3 provides further information on this. You may also treat this tax as input tax on the same VAT Return, subject to the normal rules for claiming input tax (see paragraph 2.13).

16.6 Whether to include the value of intra-EU supplies of services in box 8 of your VAT Return

The value of services supplied or acquired should not be included in boxes 8 or 9 of your VAT Return. These boxes should only be used to record intra-EU supplies or acquisitions of goods and related costs.

16.7 Records to keep in order to account for tax on your acquisitions

In addition to the normal VAT records you’re required to keep, you must, if you’re involved in buying goods from VAT-registered traders in other member states, keep all of the following records:

Item Description
1 VAT invoices issued to you by suppliers in other member states
2 Documents relating to goods acquired by you from other member states
3 Copies of your completed EC Sales Lists (your EC Sales List account) (see section 17)
4 Copies of your Intrastat Supplementary Declarations if applicable (see section 18)

16.8 Record the tax due on acquisitions in your VAT account

You must calculate the VAT due on the acquisition of goods from other member states (see section 7) and enter the total on the ‘VAT payable’ side of your VAT account under the heading ‘VAT due on acquisitions’.

You may then deduct the VAT due on these acquisitions as input tax on the ‘VAT deductible’ side of your VAT account, under the heading ‘VAT deductible on acquisitions’, subject to the normal rules for claiming input tax (see paragraph 2.13).

16.9 Records of goods sent to another member state on a temporary basis

If you’re a taxable person and you move goods to, or receive goods from, other member states on a temporary basis, you must:

Step 1

Keep a register of temporary movements of goods. The register need not be kept in any particular format (see paragraph 16.8) but it must be readily available for all goods temporarily moved to and from the UK.

Step 2

Include in the register all goods moved between the UK and other member states where they are to be returned within a period of 2 years after their first removal or receipt. It would also be advisable to include any goods for which you’re not sure of the date of return.

16.10 Information to record in your temporary movement register

You should record the following:

Item Information
1 For goods you’re sending out of the UK - the date the goods were removed
2 For goods received from another member state - the date the goods arrived
3 The date the goods are returned
4 A description of the goods
5 The reason for the movement (for example process work)
6 The consideration for the supply, if applicable

16.11 Records to keep for removals

If you remove goods to another EU member state you must keep the records and detailed accounts described in the VAT guide (Notice 700). Your records must provide a clear link with the evidence required in this notice. It’s important that you follow the accounting instructions explained in paragraph 16.10 if the goods are not removed or you do not hold evidence to show removal of the goods within the time limits.

16.12 Adjust your accounts if goods are not removed or you do not receive evidence of removal

Whether you or your VAT-registered EU customer arranges for the removal of goods to another EU member state, you can only zero rate the supply in your records when the goods are supplied to your customer and you meet the conditions set out in paragraphs 4.3 and 4.4.

If the goods have not been removed or you do not have satisfactory evidence of removal within 3 months (6 months for goods involved in processing or incorporation before removal) and the goods would be subject to VAT in the UK, you must account for VAT. You must amend your VAT records and account for VAT on the invoiced amount or consideration you have received. For a VAT rate of 17.5% the VAT element would be calculated at 7/47 and for the 20% rate (from 4 January 2011) at 1/6.

To amend your VAT records, you must make an entry equal to the tax on the supplies concerned on the ‘VAT Payable’ side of your VAT account. Include this amount in box 1 of your VAT Return for the period in which the time limit expires. If you do not, you’re likely to be assessed for tax due on the supplies and may incur default interest and a financial penalty.

16.13 What to do if the goods are later removed or you receive evidence of removal after you’ve accounted for VAT

If the goods are subsequently removed from the UK or you later get evidence showing that the goods were removed, you may zero rate the supply and adjust your VAT account for the period in which you get the evidence. This is provided that the goods have not been used in the UK before removal, unless specifically authorised.

16.14 When to issue a VAT invoice

You must normally issue a VAT invoice within 30 days of making the supply of:

  • standard-rated goods or services to a registered person in the UK
  • goods or services, other than exempt supplies, to a person in another member state
  • goods or services to a non-taxable person in another member state (such as a public body, a charity or an unregistered business)
  • distance sales of goods (for example mail order) to unregistered persons in other member states)
  • new means of transport (motor vehicles, boats or planes) to persons in other member states

You should also issue a VAT invoice within 30 days of receiving a payment on account from a customer in another member state.

If you wish or need to invoice outside this 30 day period you should contact the VAT helpline explaining the full circumstances. But we may refuse permission.

16.15 Whether to issue a full VAT invoice to a VAT-registered customer in another member state

A full VAT invoice must always be issued if you wish to zero rate a supply to a customer registered for VAT in another member state.

16.16 Information you should show on a VAT invoice

If you make supplies to a customer in another EU country, the VAT invoice you issue must show the following details in addition to the information normally required on a VAT invoice issued to a UK customer:

Item Information
1 The letters ‘GB’ (the ‘country identifier’ for the UK) as a prefix to your VAT registration number
2 The VAT registration number, if any, of your customer in the other member state, including the country identifier as a prefix (see paragraph 16.19)
3 In the case of a new means of transport, a description which identifies it as such
4 A reference to indicate that the supply is a zero-rated intra-EU supply of goods

For further information about information normally required to be included on a VAT invoice, see the sections dealing with VAT invoices in the VAT guide (Notice 700).

16.17 What currency to use on an invoice

You can invoice in any currency when you issue VAT invoices for supplies where the customer in the other member state is registered for VAT and their registration number is quoted on the invoice.

Where UK VAT is chargeable (for example, on distance sales) the sterling equivalent of the amount of VAT, if any, at each rate must always be shown. For further information about this, see the sections dealing with VAT invoices in the VAT guide (Notice 700). See paragraph 8.5 for information about the exchange rates which may be used.

16.18 Typical VAT invoice for supplies to another member state

This is an example of a VAT invoice issued for supplies made to a customer in Germany.        
Sales invoice no 174        
VAT regd no GB 987 6543 21

To: EIN ANDERHOCHSTRASSEBONN

VAT regd no DE 99345195 5

Time of supply 15/02/2006

Date of issue 19/02/2006

Sale
       
         
Quantity Description and price Amount exclusive of VAT VAT rate VAT net
    £ % £
         
6

4

6
Radios, SW15 @ £25.20

P/C SM1993 @

£319.20

Lamps T77 @ £15.55
£151.20

£1,276.80

£93.30
   
    £1,521.30 0 0.00
         
Terms: Cash discount of £1,521.30      
         
5% if paid within 30 days VAT 0.00      
         
‘Zero-rated intra-EU supply’ * Total £1,521.30      
* This wording is not prescriptive. Similar wording or a reference to the relevant EC or UK law is acceptable.        

16.19 Country codes and VAT registration numbers in the other member states

The table shows the:

  • format of VAT registration numbers in each member state
  • country codes which you should use as a prefix to those VAT registration numbers for your EU customers

Customer’s VAT registration numbers should be verified using the Europa website VIES VAT number validation or by contacting the VAT helpline.

In certain countries for example Spain and Italy, businesses are required to register their VAT number for Intra-EU use and if they do not do this, the number will show as invalid on the VIES VAT number validation checker. You may need to contact your customer and advise them to register the number for intra-EU use.

The country code to use as a prefix to your UK VAT registration number is GB.

Member state Country code Format of VAT number Number of characters
Austria (1) AT U12345678 9
Belgium (2) BE 0123456789 10
Bulgaria BG 012345678 or 0123456789 9 or 10
Croatia HR 12345678901 11
Republic of Cyprus (see paragraph 2.4 for extent of VAT territory) (3) CY 12345678X 9
Czech Republic (4) CZ 12345678 or

123456789 or

1234567890
8, 9 or 10
Denmark DK 12345678 8
Estonia EE 123456789 9
Finland FI 12345678 8
France (5) FR 12345678901 or

X1234567890 or

1X123456789

or

XX123456789
11
Germany (6) DE 123456789 9
Greece EL 012345678 9
Hungary HU 12345678 8
Ireland (7) IE 1234567X or

1X23456X or

1234567XX
8

Second character can also be ‘+’ or ‘*’

9
Italy IT 12345678901 11
Latvia LV 12345678901 11
Lithuania LT 123456789 or

123456789012
9 or 12
Luxembourg LU 12345678 8
Malta MT 12345678 8
Netherlands (8) NL 123456789B01 12
Poland PL 1234567890 10
Portugal PT 123456789 9
Romania RO 01234567890 2 to 10 digits
Slovakia SK 1234567890 10
Slovenia SI 12345678 8
Spain (9) ES X12345678 or

12345678X or

X1234567X
9
Sweden SE 123456789001 12

Notes

  1. First character is always U.
  2. 9 digits prior to 1 April 2005. Prefix any 9 digit numbers with ‘0’.
  3. Last character must be a letter.
  4. Where 11, 12 or 13 numbers are quoted - delete the first 3 as these are a tax code.
  5. May include alpha characters, either first, second or first and second.
    All alpha characters except I and O are valid.
    Must be the 11 alpha numeric TVA number, not the 14 digit SERIT number.
  6. Must be the 9 character Umsatzsteuer Identifikationsnummer (ust - Id Nr) not the 10 character Umsatzsteuer nummer.
  7. Includes one or 2 alpha characters - either last, or second and last.
  8. The tenth digit is always B.
    Three digit suffix will always be in the range B01 to B99
  9. Includes one or 2 alpha characters - first or last, or first and last.

17. EC Sales Lists

17.1 The purpose of EC Sales Lists

All businesses registered for VAT have to submit EC Sales Lists for their EU supplies of goods or services subject to the reverse charge in their customer’s member state. The information provided on the EC Sales List is used in the UK and by other member states to make sure that VAT has been correctly accounted for. It’s a condition of zero rating for intra-EU supplies of goods that you have a valid VAT registration number for your EU customer. The VIES VAT number validation provides an electronic checking facility for all member states VAT registration numbers (see paragraph 4.9).

17.2 Member states and EC Sales Lists

Other member states have EC Sales Lists, but they’re called ‘recapitulative statements’ or ‘summary statements’.

17.3 Who completes an EC Sales List

You must complete an EC Sales List if you:

  • make supplies of goods to a business registered for VAT in another member state, including transfer of your own goods, (see section 9)
  • are the intermediary in triangular transactions between VAT-registered traders in other member states, (see section 13)
  • make supplies of services subject to the reverse charge in your customer’s member state

You do not need to complete an EC Sales List if you’re involved in triangulation and the goods are exported to a final customer outside the EU, (see VAT on goods exported from the UK (Notice 703). The triangulation simplification measures do not apply in these circumstances

17.4 How to submit your EC Sales List

(a) Electronically

You may submit an EC Sales List electronically using:

The benefits of submitting data electronically include:

  • a user friendly system
  • front end validation of data (in this instance, identification of errors on screen)
  • a facility to view past internet submissions
  • a secure system using SSL encryption technology
  • time stamped acknowledgement of data submitted

The service is free with registration and enrolment through HMRC online services.

Submitting electronically will help your business by reducing:

  • paperwork
  • manual entry delays
  • manual entries
  • time spent on correcting errors
  • your administration and thereby your costs

For assistance with the online service you should contact the online services helpdesk.

(b) Paper format

You can also submit your EC Sales List on the paper form VAT101.

17.5 How to get a form VAT101 or VAT101A

You can get a form VAT101 in various ways.

Option Source
1 You will automatically be sent an EC Sales List (form VAT101) if you put an entry in box 8 of your VAT Return. The form will be sent to you separately from your VAT Return and should be returned separately
2 If you have internet access you can get copies from GOV.UK (see paragraph 17.6)
3 If you have a low level of EC sales you may be eligible to complete a simplified EC Sales List annually (see paragraph 17.7)

If you run out of space EC Sales List continuation sheet (VAT101A) is available.

17.6 What you can get online

You can complete your EC Sales Lists online, download forms and find help on how to complete them as follows:

  • EC Sales List (form VAT101) (an example, including notes on completion, can be found at paragraph 17.10)
  • EC Sales List continuation sheet (form VAT101A)
  • EC Sales List correction sheet (form VAT101B)
  • information on how to report your EU sales

17.7 How often to submit your EC Sales List

This will depend on whether you supply goods or services and for goods the quarterly value (excluding VAT) of those supplies. But there’s no requirement to submit nil EC Sales Lists.

If you you will
make supplies of services only be required to submit an EC Sales List for each calendar quarter ending 31 March, 30 June, 30 September and 31 December but may choose to submit monthly if you prefer (see also paragraph 17.9)
make supplies of goods and the value of those supplies has not exceeded £35,000 (excluding VAT) in the current, or 4 previous quarters be required to submit an EC Sales List for each calendar quarter ending 31 March, 30 June, 30 September, and 31 December but may choose to submit monthly if you prefer (see also paragraph 17.9)
make supplies of goods and the value of those supplies has exceeded £35,000 (excluding VAT) in the current, or 4 previous quarters be required to submit EC Sales Lists calendar monthly

(If you submit separate EC Sales Lists for branches within your business and the total value of goods supplied from all the branches is more than £35,000, each branch will have to submit a monthly EC Sales List)
make supplies of goods and services and because the value of the supplies of goods is above the quarterly threshold, you’re required to submit monthly EC Sales Lists for goods have the choice to either:
report both goods and services in each month, (using indicator 3 to identify supplies of services), or
report only goods in months 1 and 2, and in month 3 report goods for the month and services for the whole quarter (using indicator 3 to identify supplies of services)
supply goods or services, make annual VAT Returns and:
your total annual taxable turnover does not exceed £145,000, and
the annual value of your supplies to other member states is not more than £11,000, and
the supplies do not include new means of transport (boats, aircraft and motorised land vehicles - for further information about this, see VAT Notice 728: new means of transport)
be able to apply to the VAT helpline for approval to submit your EC Sales List once a year and agree the due date for sending in your annual EC Sales List
supply goods only (including triangular transactions - see paragraph 13.8), have a low level of EU sales and
your total taxable turnover does not exceed the VAT registration threshold plus £25,500
the annual value of your supplies to other member states is not more than £11,000
the supplies do not include new means of transport (boats, aircraft and motorized land vehicles - for further information about this see VAT Notice 728: new means of transport
be able to apply to the VAT helpline for approval to submit a simplified annual EC Sales List and agree the due date for sending in your annual EC Sales List
if you receive approval you’ll be allowed to complete a less detailed EC Sales List, showing only the VAT registration numbers of your EU customers - actual values are not required but you must enter a nominal value of £1 for each entry on the EC Sales List form

17.8 Due date for submitting an EC Sales List

The deadlines for submitting an EC Sales List to HMRC, for all frequencies of submissions and for goods and services are for:

  • paper EC Sales Lists - within 14 days of the end of the reporting period
  • electronic (online) EC Sales Lists - within 21 days of the end of the reporting period

17.9 Changing VAT Return periods to coincide with calendar quarterly EC Sales List periods

You can apply to the National Registration Service (NRS) to change your VAT Return periods to coincide with your calendar quarterly EC Sales List period. Advice on how to contact the NRS can be found from the VAT helpline.

17.10 Copy of the EC Sales List (form VAT 101)

This paragraph has force of law.

The form VAT101 is specified in this section of this notice for the purposes of VAT Regulations (SI 1995/2518), Regulation 22A(2)(a).

17.11 Information you must provide on your EC Sales List

You must provide all of the following information:

Information Description
Country code The 2 letter prefix which identifies your customer’s country code, as shown in paragraph 16.19
Customer’s VAT registration number The VAT registration number of your customer in the other member state. The table in paragraph 16.19 shows the only acceptable format of EU VAT numbers. We recommend that you check your customer’s VAT registration numbers regularly using the Europa website (see paragraph 17.1)
Total value of supplies in £s sterling The total value for the appropriate period of:

goods and related services which you have supplied to each customer, leaving the indicator column blank (related services are services which form part of the price of the goods such as freight charges and insurance.)

Triangular transactions, entered on a separate line for each customer and using code ‘2’ in the indicator column, and
supplies of services subject to the reverse charge in your customer’s member state, entered on a separate line for each customer and using code ‘3’ in the indicator column

If you make a supply of services to a business which is not registered for VAT in their member state because it is below the registration threshold, but which has provided you with evidence that it is in business (for place of supply purposes), you should not include these supplies on your EC Sales List.

If you’re completing a simplified annual EC Sales List you must insert £1 in the value column for each entry

17.12 Penalty if you fail to submit your EC Sales List, send it in late, or make mistakes

If you fail to submit your EC Sales List by the due date (see paragraph 17.8) you may be liable to a penalty of £5, £10 or £15 for each day that you’re late, subject to a maximum of 100 days. The rate applied will depend on the number of times you have been late. You’ll remain liable to penalties without notice until 12 months have elapsed without further default.

If you submit an EC Sales List that contains a material inaccuracy and you fail to tell us, you may be liable to a penalty of £100. Material inaccuracies fall into 3 main categories:

  • data is missing from the EC Sales List
  • there are factually incorrect lines on the EC Sales List
  • an invalid VAT number is used

You will not be liable to a penalty if you can satisfy us that you have a reasonable excuse (see paragraph 17.13).

17.13 The meaning of ‘reasonable excuse’

There’s no legal definition of reasonable excuse but we’ll look closely at the circumstances of each case. If you can show that your conduct was that of a conscientious business person who accepted the need to comply with VAT requirements, then there may be a reasonable excuse.

Genuine mistakes, honesty and acting in good faith are not accepted as reasonable excuses for penalty purposes. The law provides specifically that you do not have a reasonable excuse if you relied on some other person to perform any task for you.

In addition, the fact that you have:

  • quoted a VAT number for your customer that does not conform to the published format for your customer’s EU member state as shown in paragraph 16.19
  • used a VAT number which we’ve told you is invalid

will not be accepted as a reasonable excuse for the material inaccuracy. In such cases you may also be liable to account for the VAT on any supplies where you have not met the requirements for zero rating (see paragraph 4.3).

17.14 What happens if there are errors

If you submit a paper EC Sales List we will notify you of any errors that we identify on a form VAT104 (EC Sales List Error Report). The computer-generated form is sent to you with a copy of our ‘Helpful hints’ document. The form will show the error lines and the reasons for the errors. Correct the errors in the spaces provided and return the form within 21 days of receipt to the address shown. Alternatively, you can voluntarily submit a VAT101B to notify HMRC of any errors made.

If you submit your EC Sales List online using the ECSL service, any errors are highlighted on screen as you complete the form, allowing you to correct them prior to submission. If you choose to submit the EC Sales List with some errors still remaining, you will be able to correct these errors online, up to 21 days after the date of submission. After that date, the facility will no longer be available and any outstanding errors will be notified to you in writing.

If you submit by CSV or XML you can still use the online correction service to correct error lines identified at the time of submission. Alternatively, if you decide to submit a new file, you must delete the error lines from your original submission within 21 days, using the ‘Correct declaration errors’ page on the ECSL Online Service, to avoid receiving correspondence on this subject.

17.15 How to avoid making errors

When completing your EC Sales List make sure that:

  • you check the validity of your customer’s VAT number (see paragraph 4.9)
  • the country code and customer number match the format for the relevant member state (see paragraph 16.19)
  • the value of supplies is in £’s sterling, rounded down to the nearest £, starting from the right hand side of the box (the decimal point and pence have already been entered on the form)
  • you enter the total value of each type of sale one entry per customer, per period of submission
  • if you supplied goods, you enter the value (including related costs such as freight and insurance charges) of all the goods supplied to that customer (deducting credit notes where appropriate) and leave the indicator column blank
  • if you were an intermediate supplier in a triangular sale, you enter the total value of the supplies to each customer (deducting credit notes where appropriate) on a separate line from any other supplies made to that customer and enter 2 in the indicator column
  • if you supplied services which were subject to the reverse charge in the customer’s member state, you enter the total value of these supplies to each customer, (deducting credit notes where appropriate) on a separate line from any other supplies made to that customer and enter 3 in the indicator column
  • you enter your customer’s VAT registration number (starting from the left hand side of the box
  • you complete the bottom of the EC Sales List form with the number of pages you’re submitting (‘Number of pages to this list’ box) and your declaration including your contact phone number, signature and date
  • you retain a copy of the completed EC Sales List for your records
  • advise us if you will no longer be making any EU supplies by contacting the VAT helpline

Do not:

  • put the country code in the Customer VAT Registration Number box
  • enter dashes, spaces, commas or slashes
  • enter details for the Canaries, the Channel Islands, Gibraltar, Norway and Switzerland, or any other countries which are outside the EU (see paragraph 2.4)
  • enter EU customer VAT registration numbers that you think may be correct - check them using the Europa website (see paragraph 4.9)
  • alter any of the details on your printed EC sales VAT101 form - if any of the details are wrong, or you have a query, contact the VAT helpline
  • send a ‘nil’ return - EC Sales Lists are not required if you have not made any supplies to the
  • include supplies to UK customers as these are not EU transactions

17.16 What to do if you’ve made errors

You must tell us about all errors and omissions on your EC Sales List where:

  • errors exceed £100
  • an incorrect VAT registration number has been quoted
  • you have used the wrong transaction type indicator when completing the EC Sales List

Use EC Sales List correction sheet to tell us about any errors you’ve made.

For help with correcting errors contact the VAT Helpline or email the ESL Helpdesk: esl.helpdesk@hmrc.gsi.gov.uk.

17.17 Submit separate EC Sales Lists for different parts of your business

You can choose to submit separate EC Sales Lists on paper or online if you have:

  • individual branches of your business
  • individual companies within a group VAT registration
  • self accounting branches within a group VAT registration

You should contact HMRC to arrange to do this. You will be given a 3-digit code for each branch or company in your business. You will need to use this as an identifier when you complete the separate EC Sales Lists. If you wish to submit data online for individual branches you must register each one separately with HMRC online services.

Note that if the total value of goods supplied from all the branches of your business is more than £70,000 (excluding VAT) in the current or previous 4 quarters, each branch will have to submit a monthly EC Sales List.

17.18 Use an agent to send in your EC Sales List

You may use an agent to act on your behalf, but the legal responsibility for the accurate and timely completion and submission of an EC Sales List remains with you.

Any agent can submit an online EC Sales List on behalf of a client but the agent must be registered for VAT and appointed online by the client to act on their behalf.

The client should enrol online, as an organisation, for the EC sales service. An activation PIN will be issued (by post) and once the client has activated the service, they should login to the Government Gateway website and select ‘Manage services’, then ‘Appoint agent’, They should then enter the agents reference number, in order to link their VAT number to the agents online account.

17.19 Completing an EC Sales List if your only EU supplies are triangular transactions

If your only EU supplies are part of a triangular transaction, you’re still required to submit an EC Sales List and this can be submitted online, or by phoning the VAT helpline who will arrange for EC Sales Lists to be sent to you automatically.

17.20 Completing an EC Sales List if your only EU supplies are services

If your only EU supplies are services subject to the reverse charge in your customer’s member state, you’re still required to submit an EC Sales List (see paragraph 17.21).

17.21 Supplies of goods on the EC Sales List that would be zero-rated if supplied within the UK

You must complete an EC Sales List if you make supplies of goods to a trader registered for VAT in another member state, including the transfer of your own goods and goods that would be zero-rated if supplied within the UK.

17.22 Goods supplied free of charge to a customer in another member state

You’re making a deemed supply of goods and you must include it on your EC Sales List. The value you show is the cost to you of the goods. Samples or gifts may be excluded provided you meet the conditions described in the section dealing with output tax in the VAT guide (Notice 700).

17.23 Distance selling

If you make supplies of goods to customers who are not VAT-registered in other member states and you’re responsible for delivery of the goods (distance selling - see section 6) do not enter these supplies on your EC Sales List.

17.24 Temporary movements of your own goods to another member state

You do not include temporary movements unless the conditions relating to the transfer change (see section 10).

17.25 How to account for credit notes

Deduct the value of the credit note from the value of the supplies made to your customer. If the value of credit notes exceeds the value of supplies show the resulting negative figure using a minus sign.

17.26 Determine the liability of a supply of services in your customer’s member state

The law requires that businesses report supplies of services that are taxable in the customer’s member state (from 1 January 2010) and the onus is on businesses to comply with the law. If reasonable attempts, which may include discussing with the customer, or the customer’s tax authority, have failed to ascertain what the VAT treatment is in the other member states, businesses may wish to assume that the UK VAT treatment will apply to those supplies. This is on the basis that it should be consistent with the EC Principal VAT Directive and therefore with the law in other member states.

If subsequently it becomes clear that a supply categorised and reported as taxable is in fact exempt, or vice versa, the business must submit a VAT101B EC Sales List correction sheet.

Once the business has knowledge that a VAT treatment of a supply in a member state is different to that in the UK, it should adopt this treatment in their reporting of such supplies to that jurisdiction in the future.

17.27 Supplies to a ‘taxable person’ in another member state if they do not have a VAT registration number

You should only record on an EC Sales List supplies to businesses in other member states that are VAT-registered and can provide a valid VAT registration number. If you make a supply to a business which is not registered for VAT in their member state because it is below the registration threshold, but which has provided you with evidence that it is in business (for place of supply purposes), you should not include these supplies on your EC Sales List. This is because the absence of a VAT registration number would cause it to be rejected.

But in some cases receipt of the supply will result in the business being required to register in their member state. If this is the case and a VAT registration number is subsequently given to you, an amendment should be made to the EC Sales List using form VAT101B EC Sales List correction sheet.

17.28 When to include intra-EU supply of services on an EC Sales List

The date on which a transaction should be included on the EC Sales List is dependent on the time of supply rules in the customer’s member state. On the basis that other member states rules are, like the UK’s, consistent with the adopted EU legislation, the time of supply will be either the date of payment or performance (completion), whichever is the earlier.

There is no requirement for a business to confirm with the customer that the EC Sales List period and the VAT period on which they declare the transaction as a reverse charge match. For the purposes of completing an EC Sales List, where it is evident that for certain types of supply the date of performance or date of payment is almost the same as ‘date of invoice’, the ‘invoice date’ may be used.

As a general principle we will accept reliance on an invoice date or any other reasonable methodology provided it does not produce a manifestly inaccurate overall result. Ultimately it is up to individual businesses to identify the most appropriate methodology for their particular circumstances.

17.29 Continuous supplies of management services

You can use the quarterly invoice date to complete your EC Sales List for continuous supplies of management services.

17.30 EC Sales List if the supply of services is subject to a ‘zero rate’ in the customer’s member state

EC Sales Lists are only required for taxable supplies where the recipient is liable to account for VAT under the reverse charge provisions. For zero-rated supplies there iss no reverse charge so there’s no EC Sales List requirement.

18. Intrastat

18.1 The meaning of ‘Intrastat’

Intrastat is the name given to the system for collecting statistics on the trade in goods between member states. Intrastat replaced customs declarations as a source of trade statistics within the EU. It exists throughout the EU and requirements are similar in all member states.

18.2 Supplies of services included in Intrastat

Supplies of services are excluded from Intrastat except where they’re related charges such as freight and insurance and form part of the contract to supply goods.

18.3 Intra-EU trade statistics

All businesses carrying out trade with other member states must declare the totals of their sales and acquisitions on their VAT Returns. Those businesses over a legally set threshold are also required to provide more detailed information on Intrastat Supplementary Declarations. Intra-EU trade statistics are compiled from the Supplementary Declarations and estimations made using the information on the VAT Returns. For details of the current Intrastat threshold see Notice 60: Intrastat general guide.

18.4 How to declare values of EU trade on a VAT Return

All businesses registered for VAT must complete 2 boxes on their VAT Returns showing the total value of goods supplied to other member states and the total value of goods acquired from other member states, see paragraph 16.3. For further information about this, see VAT Notice 700/12: how to fill in and submit your VAT Return.

18.5 Completion of Supplementary Declarations by larger businesses

Those businesses with a value of trade in goods with other member states above the Intrastat threshold for either acquisitions or supplies of goods must complete Supplementary Declarations each month. For further information about this, see Notice 60: Intrastat general guide.

18.6 Description of goods for Intrastat purposes

For Intrastat purposes, goods received into the UK are called arrivals and goods consigned to another member state from the UK are called dispatches. This is because the Intrastat system developed separately from the VAT system and there are some differences in coverage between the 2 systems. For further information about this, see Notice 60: Intrastat general guide.

18.7 Further information or help

For further information about Intrastat requirements, see Notice 60: Intrastat general guide. If you cannot find the answer to your questions there, the VAT helpline will help you. You should make it clear that your enquiry is about Intrastat.

You can also get detailed guidance and updates on Intrastat matters on the Intrastat pages on the UKtradeinfo website.

18.8 Intrastat declarations online

If you want to make Intrastat declarations online, contact the Intrastat helpline. Guidance on submitting your forms electronically can also be found on the Intrastat pages on the UKtradeinfo website.

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Published 3 January 2014