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HMRC internal manual

VAT Place of Supply (Transport)

HM Revenue & Customs
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Passenger transport: Law: from 1 January 2010

UK LAW from 1 January 2010

Item 2 of Schedule 4A, Value Added Tax Act 1994

(1) A supply of services consisting of the transportation of passengers (or of any luggage or motor vehicles accompanying passengers) is to be treated as made in the country in which the transportation takes place, and (in a case where it takes place in more than one country) in proportion to the distances covered in each.

(2) For the purposes of sub-paragraph (1) transportation which takes place partly outside the territorial jurisdiction of a country is to be treated as taking place wholly in the country if—

(a) it takes place in the course of a journey between two points in the country (whether or not as part of a longer journey involving travel to or from another country), and

(b) the means of transport used does not (except in an emergency or involuntarily) stop, put in or land in another country in the course of the journey between those two points.

(3) For the purposes of sub-paragraph (1) a pleasure cruise is to be regarded as the transportation of passengers (so that services provided as part of a pleasure cruise are to be treated as supplied in the same place as the transportation of the passengers).

(4) In sub-paragraph (3) “pleasure cruise” includes a cruise wholly or partly for education or training.


EC LAW from 1 January

Article 48 Principal VAT Directive

The place of supply of passenger transport shall be the place where the transport takes place, proportionate to the distances covered.