VEXP10510 - Introduction: VAT law on exports and removals: EU law

Council VAT Directive 2006/112/EC – known as the Principal VAT Directive

The Principal VAT Directive 2006/112 .

Article 131 Requires member states to make conditions that apply to exemptions (zero rating in the UK) to ensure the straightforward application of the exemptions and to prevent evasion, avoidance or abuse.

The exemptions provided for in Chapters 2 to 9 shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse.

Article 138(1) Provides the legal basis for the zero rating of goods supplied for removal from the UK to a VAT registered customer in another member State.

Member States shall exempt the supply of goods dispatched or transported to a destination outside their respective territory but within the Community, by or on behalf of the vendor or the person acquiring the goods, where the following conditions are met:

(a) the goods are supplied to another taxable person, or to a non-taxable legal person acting as such in a Member State other than that in which dispatch or transport of the goods begins;

(b) the taxable person or non-taxable legal person for whom the supply is made is identified for VAT purposes in a Member State other than that in which the dispatch or transport of the goods begins and has indicated this VAT identification number to the supplier.

Article 146(1)(a) Provides the legal basis for the zero rating of goods exported by or on behalf of the vendor.

Member States shall exempt the following transactions:

(a) the supply of goods dispatched or transported to a destination outside the Community by or on behalf of the vendor;

Article 146(1)(b) provides the legal basis for the zero rating of goods exported by or on behalf of a purchaser not established in the supplier’s country.

Member States shall exempt the following transactions:

(b) the supply of goods dispatched or transported to a destination outside the Community by or on behalf of a customer not established within their respective territory, with the exception of goods transported by the customer himself for the equipping, fuelling and provisioning of pleasure boats and private aircraft or any other means of transport for private use;

Article 148 (a) and (b) provide the legal basis for the zero rating of goods supplied for use as ships stores.

Member States shall exempt the following transactions:

(a) the supply of goods for the fuelling and provisioning of vessels used for navigation on the high seas and carrying passengers for reward or used for the purpose of commercial, industrial or fishing activities, or for rescue or assistance at sea, or for inshore fishing, with the exception, in the case of vessels used for inshore fishing, of ships’ provisions;

(b) the supply of goods for the fuelling and provisioning of fighting ships, falling within the combined nomenclature (CN) code 8906 10 00, leaving their territory and bound for ports or anchorages outside the Member State concerned;

Article 148(e) provides the legal basis for the zero rating of goods supplied for use on board aircraft on international routes.

Member States shall exempt the following transactions:

(e) the supply of goods for the fuelling and provisioning of aircraft used by airlines operating for reward chiefly on international routes;