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HMRC internal manual

VAT Place of Supply (Transport)

Freight transport: Law: Amendment 20 December 2012

UK Law amendment 20 December 2012

Schedule 4A, Value Added Tax Act 1994

Item 9B

Where—

(a)     a supply of services to a relevant business person consisting of the transportation of goods would otherwise be treated as made in the United Kingdom, and

(b)     the transportation takes place wholly outside the member States,

the supply is to be treated as made wholly outside the member States.

EC Law

Article 59a Principal VAT Directive

In order to prevent double taxation, non-taxation or distortion of competition, Member States may, with regard to services the place of supply of which is governed by Articles 44, 45, 56 and 59:

 (a)     consider the place of supply of any or all of those services, if situated within their territory, as being situated outside the Community if the effective use and enjoyment of the services takes place outside the Community;

 (b)     consider the place of supply of any or all of those services, if situated outside the Community, as being situated within their territory if the effective use and enjoyment of the services takes place within their territory.

 However, this provision shall not apply to the electronically supplied services where those services are rendered to non-taxable persons not established within the Community.