beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

VAT Place of Supply of Services

General rule: Introduction

Section 7A of the VAT Act 1994 provides that the place of supply of services for supplies made to relevant business persons (B2B) is the place where the recipient belongs, and, for non-business customers (B2C), it is the place where the supplier belongs. This is referred to as the general rule.

Exceptions to the general rule are given Schedule 4A to the VAT Act 1994. Whilst it is referred to as the general rule it does not take precedence. For this reason it is important to always look first at the exceptions, and only if none apply should the general rule be used.

This has been confirmed, in the context of the former Article 9, by the ECJ. The ECJ has observed on more than one occasion (for example von Hoffmann C-145/96) that:

As regards the relationship between art 9(1) and (2) (of the Sixth Directive), the court has already held that art 9(2) sets out a number of specific instances of places where certain services are deemed to be supplied, whereas art 9(1) lays down the general rule on the matter. The object of those provisions is to avoid, first, conflicts of jurisdiction, which may result in double taxation, and, secondly, non-taxation, as art 9(3) indicates, albeit only as regards specific situations.

It follows that, when art 9 is interpreted, art 9(1) in no way takes precedence over art 9(2). In every situation, the question which arises is whether it is covered by one of the instances mentioned in art 9(2); if not, it falls within the scope of art 9(1).