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HMRC internal manual

VAT Place of Supply (Transport)

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

UK Law from 1 January 2010

Section 7A, Value Added Tax Act 1994

(1) This section applies for determining, for the purposes of this Act, the country in which services are supplied.

(2) A supply of services is to be treated as made—

(a) in a case in which the person to whom the services are supplied is a relevant business person, in the country in which the recipient belongs, and

(b) otherwise, in the country in which the supplier belongs.

(4) For the purposes of this Act a person is a relevant business person in relation to a supply of services if the person—

(a) is a taxable person within the meaning of Article 9 of Council Directive 2006/112/EC,

(b) is registered under this Act,

(c) is identified for the purposes of VAT in accordance with the law of a member State other than the United Kingdom, or

(d) is registered under an Act of Tynwald for the purposes of any tax imposed by or under an Act of Tynwald which corresponds to value added tax,

and the services are received by the person otherwise than wholly for private purposes.

(5) Subsection (2) has effect subject to Schedule 4A.Schedule 4A, Value Added Tax Act 1994

Paragraph 11

(1) A supply of services to a person who is not a relevant business person consisting of the transportation of goods 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) This paragraph does not apply to a transportation of goods beginning in one member State and ending in another (see paragraph 12).

Paragraph 12

A supply of services to a person who is not a relevant business person consisting of the transportation of goods which begins in one member State and ends in another is to be treated as made in the member State in which the transportation begins.

Paragraph 13

(1) A supply to a person who is not a relevant business person of ancillary transport services is to be treated as made where the services are physically performed.

(2) “Ancillary transport services” means loading, unloading handling and similar activities.

 

EC Law after 1 January 2010

Article 44 Principal VAT Directive

The place of supply of services to a taxable person acting as such shall be the place where that person has established his business. However, if those services are provided to a fixed establishment of the taxable person located in a place other than the place where he has established his business, the place of supply of those services shall be the place where that fixed establishment is located. In the absence of such place of establishment or fixed establishment, the place of supply of services shall be the place where the taxable person who receives such services has his permanent address or usually resides.

Article 49 Principal VAT Directive

The place of supply of the transport of goods, other than the intra-Community transport of goods, to non-taxable persons shall be the place where the transport takes place, proportionate to the distances covered.

Article 50 Principal VAT Directive

The place of supply of the intra-Community transport of goods to non-taxable persons shall be the place of departure.]Article 51 Principal VAT Directive

Article 51 Principal VAT Directive

“Intra-Community transport of goods” shall mean any transport of goods in respect of which the place of departure and the place of arrival are situated within the territories of two different Member States.

“Place of departure” shall mean the place where transport of the goods actually begins, irrespective of distances covered in order to reach the place where the goods are located and “place of arrival” shall mean the place where transport of the goods actually ends.

Article 52 Principal VAT Directive

Member States need not apply VAT to that part of the intra-Community transport of goods to non-taxable persons taking place over waters which do not form part of the territory of the Community.