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HMRC internal manual

VAT Single Market

Particular types of transaction: supplies to privileged persons

This section covers supplies to

  • diplomatic Missions
  • international organisations
  • NATO Forces based in other Member States, and
  • British forces based in the Sovereign Base Area (SBA) of Cyprus.

A VAT registered supplier may zero-rate supplies of goods, (other than new means of transport), or services made to an entitled person or entitled bodies resident or situated in other EC countries provided

  • the goods or services are for either the official use of the entitled mission or for the personal use of the entitled person
  • the supplier obtains from the customer a certificate of exemption from VAT under Article 151 of the Principal VAT Directive
  • in the case of goods, they are removed directly to the Mission premises in another Member State, and
  • the supplier obtains and keeps proof of removal (that is commercial proof of export or removal normally acceptable for VAT zero-rating purposes) within three months of the time of supply.

If these conditions are not met the supply must be treated as though the goods have been dispatched to a private individual in the EC and VAT charged where appropriate.

The conditions relating to supplies of goods and services to British Forces based in the SBA of Cyprus can be found in Notice 725 (The Single Market).