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HMRC internal manual

VAT Single Market

The Single Market concept: background

One of the fundamental visions behind the creation of the European Community was the concept of a single market place which would allow for the free movement of goods, services, capital and people between Member States.

The completion of the Single Market on 1 January 1993 introduced a change in the way that VAT was charged and accounted for on goods moving between Member States. As a result such movements ceased to be treated as imports and exports. Instead supplies to customers not registered for VAT became taxable in the same way as domestic supplies either in the Member State of departure or arrival (depending on the circumstances). Whereas supplies to business customers registered for VAT became subject to acquisition VAT in the Member State of arrival.