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HMRC internal manual

VAT Place of Supply of Services

HM Revenue & Customs
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Other services to non-EU customers (B2C): Copyrights, patents, etc

This paragraph relates to the supply of intellectual property rights, rather than, for example, informal arrangements between individuals. You can find out more about intellectual property rights in the manual Supply and Consideration manual.

Similar rights within this paragraph are intellectual property rights which are capable of being legally enforced. Services which do not involve intellectual property are therefore not covered by this paragraph even though they may be described as a right or a licence.

This point has been supported by the VAT Tribunal in Winterthur Swiss Insurance Company (LON/03/0827) (VTD 19411) which considered, inter alia, the type of right that fell within paragraph 1 of Schedule 5 (the equivalent provision of the time). The Tribunal concluded that they are of a type that are protected by intellectual property law.

Examples of services falling within this provision are:

  • the grant of a license to use software
  • the grant of a right by a photographer for a photograph to be published in a magazine
  • the grant of a right to use a logo.

Example of services not falling within this provision would be:

  • supply of individual shares in goods, for example an animal or yacht, even though certain rights may be included in the supply
  • supply of a right to obtain reduced rates for admission to conferences, meetings, and so on., and similar discounts on facilities available to members of clubs, associations, societies and so on, in return for a subscription
  • supply of the right to occupy land or property including hotel accommodation
  • sale of goodwill. However, goodwill can be used to describe part of another supply of services, such as assigning a trademark, providing information or refraining from competition. It is therefore essential to identify the nature of the service being provided in order to determine the correct place of supply rule.