In fact, they write at the end of section 5.1 in VAT Notice 741A that: “The reverse charge is not a complicated accounting procedure. To increase the productivity of VAT, the Government enacted the Value Added Tax and Supplementary Duty Act of 2012. You can submit a customs declaration yourself using the National Export System. Declarations are submitted electronically using the National Export System before your goods arrive at the port of export. In practice, this is reflected on paper by shifting the normal rules of responsibility for charging VAT from the seller (you) to the buyer (your customer), making you void of any VAT responsibilities in regards to the sale. You’ll need to keep several records for VAT on exports: Put your sales into Box 6 on your VAT Return. If your services are non-digital (e.g. If your offer is digital (e.g. HMRC can ask to see it and if we think it’s unsatisfactory you may have to pay VAT on the goods or services you sold. Whether importing or exporting, there are important VAT and duty rules and procedures. You must also make sure the goods are exported, and you must get the evidence within 3 months from the time of sale. As of 1 January 2021, UK businesses have to consider imports and exports to and from European Union (EU) countries as they do for countries outside the EU. If you cannot get this evidence in time you must account for VAT on your return. 3. If you need to pay VAT on exports, make sure you’re aware of whether you need to pay the UK rate or local rate of tax, as well as the relevant VAT thresholds for individual countries. You can do this through the The National Export System for export declarations. If your customer isn’t registered for VAT, the transaction is classed as a ‘distance sale’ and you need to charge UK VAT. VAT: how to report your EU sales How VAT … The time of sale is the earlier of the day you: You must not zero rate sales if your customer asks you to deliver them to a UK address. Goods; The goods are zero rated. For the purposes of this article the term VAT … Such … How Does the VAT Rebate for Exports out of China work? 2. This law was initially scheduled … VAT on goods exported is normally charged at a rate of 14% (standard rated) or 0% (zero rated). You may have to account for UK VAT unless you’re also registered for VAT in the EU country where you send them, in which case you can zero-rate them as long as you meet all the usual conditions. The dispatch pack goes with the goods. If you are approaching annual sales of £250,000, you may receive a letter from HMRC alerting you that you may need to register for Instrat soon. Export sales are exempt from UK VAT. You can find out more about removals in Notice 725: the singl… What are … But as long as the customer either operates the storage facility where the goods are held, or is at least aware that the goods have been delivered into storage for them, you can treat the goods in the normal way and, if all the usual conditions have been met, zero rate the supply. Liability to VAT. Call-off stocks are goods that you dispatch from the UK to an EU country, and keep in storage ready for a particular customer in that country. This is acceptable evidence that the goods have gone abroad. If your sale is zero-rated, your invoice should include the customer’s VAT number. Exports are thus exempt from VAT, however you can still take a deduction for input VAT. 4 Ensure eligible for export VAT exemption. Export is zero rated. In Germany, Helen sells €80,000 worth of t-shirts, but as the distance selling VAT threshold there is €100,000 she doesn’t have to register for VAT and can continue charging customers the UK rate of 20%. Remember: though sales are zero-rated, they still need to be declared on your VAT return. VAT on the export of goods or services only applies within the EU. For example, if you run a small building company that is hired to work on a home restoration project by an ex-pat living in France, your invoice would need to include the total amount for your work + 20%. Excise goods or goods subject to customs control exported to the Channel Islands need a Single Administrative Document (SAD) declaration on form C88. Standard VAT rate is 15%. You must keep all the evidence for 6 years and show it to HMRC if they ask to see it. To learn more about the most common VAT return errors, read our guide to how to avoid and rectify common VAT mistakes . All UK registered traders have to send lists of their EU sales to HMRC. 2. VAT: exports, dispatches and supplying goods abroad VAT may be due if you sell, supply or transfer goods out of the UK - find out about zero-rated goods, proof to keep and forms to complete. We use this information to make the website work as well as possible and improve government services. These are called ‘temporary movements’. While your head may be spinning, GOV.UK has confidence that this is not complicated at all. October 19, 2020 1. If your customer is registered for VAT in their local country, you can ‘zero-rate’ sales, providing you keep records of your export goods leaving the UK within three months of the sale and obtain their local VAT number. You can still zero rate the sale if: If goods have to be processed in the EU after leaving you but before they’re finally exported, the time limit is 6 months. Input VAT on Exports. Complex rules and regulations govern imports and exports. When exporting goods from the RSA to any export country, you have to distinguish between two types of exports, called direct and indirect export. You’ll need it when you supply information to customs authorities, for example when completing customs declarations. Home › Blog › Small business tips › A guide to VAT rules and rates on exports. If your customer arranges to collect the goods from you, you’ll need to be sure how and when the items are leaving the UK, and what evidence of removal they’ll give you, before you agree not to charge VAT. Your customer (the buyer) is now technically responsible for both charging output tax and paying input tax for this transaction. You zero-rate VAT on goods exported to VAT-registered people within the EU. The laws governing VAT on Imports and Exports are Value Added Tax Act, 2013 (Act 870) and Value Added Tax Regulations, 2016 (L.I.2243). The UK will become a ‘third country’, which means businesses will need to go through the same processes as other non-EU countries when selling to the EU. As B2B sales to EU countries are considered outside of the scope of UK VAT, you don’t need to charge any VAT on behalf of HMRC in regards to them as long as the reverse charge applies. The best way to avoid making any mistakes is to know what the most common ones are so that you can steer clear of them. Beyond VAT, there are a number of changes on exporting that you’ll need to be aware of. If you use the National Export System, you’ll automatically get an electronic Goods Departed Message when the goods leave the UK, and this is acceptable official evidence. You have to tell us about zero-rated EU sales on 3 different forms: We’ll send you the ESL automatically if you’ve completed box 8 on your VAT Return. This means that sales to customers outside of the EU can be zero-rated. Lovewell Blake explain the issues. This includes: chemicals; good; excise goods; livestock and foodstuffs. N.B. VAT on the export of goods or services only applies within the EU. You can zero rate most supplies exported outside the EU, or sent to someone who’s registered for VAT in an EU country. Export of goods under UAE VAT. But if you transfer your own goods to an EU country, whether to another part of your organisation or to put in storage, we treat this as if you’d made a supply in the UK and an acquisition in the destination country. We use cookies to collect information about how you use GOV.UK. You can find this by looking up your product in, The customs procedure code (CPC). Brexit means... changes to the VAT rules for imports and exports. 1. The movable … You don’t need to worry about an EORI for exporting services. If you supply goods to a customer in an EU country who is not registered for VAT in that country and you’re responsible for delivery, this is a ‘distance sale’. You do not have to register for VAT to import goods, but obviously if you do not register you will not be able to claim back any VAT you pay. Based on this classification, VAT … The following is based on an assumption the exporting company is VAT registered and that the annual exports to the EU are under £250,000 in value which is below the current Intrastat threshold. For distance sales, you must charge VAT at UK rates in the normal way. 2. – VAT (Value Added Tax) is referred to by different names across the world, for example USA = Sales Tax, France = TVA, Australia = GST. But if you’re providing construction services and supplying materials that you’re charging the customer for, you’ll need to register for Intrastat. If the evidence is unsatisfactory, then you may have to account for VAT on the sale. All content is available under the Open Government Licence v3.0, except where otherwise stated, Import, export and customs for businesses, Sales to someone who is VAT-registered in an EU country, Sales in an EU country to someone who is not VAT-registered, When you must register for VAT in EU countries, How to charge VAT to someone in an EU country, How to report EU sales where you’ve charged VAT, Temporary movements of goods to an EU country, Installing or assembling goods in an EU country, Send goods to an EU country for repair or processing, Goods you export temporarily or send on sale or return, Goods processed in the EU before they’re exported, Speeding up and simplifying the export process, VAT accounting and record keeping for exports, evidence that the goods have left the country, appointing an export agent in VAT Notice 703, Economic Operator Registration and Identification number (, Place of supply of services (VAT Notice 741A), Work out your place of supply of services for VAT rules, VAT rules for supplies of digital services to consumers in the EU, EU country codes, VAT numbers and enquiry letters for EC Sales Lists, Coronavirus (COVID-19): guidance and support, Transparency and freedom of information releases, the goods are sent out of the UK to an EU country, whoever you’re sending them to is VAT-registered in an EU country, you get their VAT registration number, including the 2 letter country code, and show it on your sales invoice, you dispatch the goods and get evidence of removal within 3 months, consignment notes showing the goods have been received in an EU country, a detailed description of the goods and their value, your normal VAT Return in box 6 and box 8, you do not have a place of business in the EU country where you’ve sent the goods, you’ve got a contract to carry out in that country and need the goods for that contract, you intend to return the goods to the UK when the contract is finished, you keep evidence that the goods have left the UK and returned, you keep a register of temporary movements to EU countries, keep a record of the temporary movement of goods, fill in the Intrastat Supplementary Declaration for the dispatch and return of the goods, the goods are delivered to the EU business, not sold to them, the EU business does not use the goods, it only processes them for export, proof of export and date of actual export, a bulk National Export System declaration by the shipping line, supported by individual Consignment Notes and Customs Declarations (, individual National Export System declarations that you make, official proof of export for VAT, either form C88 (, commercial transport evidence that the goods left the EU, copies of invoices and other sale documents. However, to benefit from the zero-rating, you need to prove that goods have been exported within three months of sending them or receiving full payment. In general terms, VAT is payable on all imports at the same rate that would apply to the product or service in the UK. Contact the tax authority in that country to check. The qualifying purchaser is then entitled to obtain a refund of the VAT paid from the VAT Refund Administrator, upon compliance with the prescribed conditions. When exporting goods from the Republic of South Africa to any destination, including SA Customs Union Countries and SADC Countries, one has to distinguish between two types of exports, namely direct and indirect exports. VAT is charged on the value of the goods plus excise duty. You’ll need to register for Intrastat and complete monthly Intrastat Supplementary Declarations (SDs) if your total sales to EU countries is more than £250,000 per year (you’ll also need to register if your total imports exceed £1.5 million). Export VAT is a tax on goods and services provided to customers outside of the UK. So if the roles are reversed and you are importing services from a B2B EU member state supplier to the UK and the reverse charge is applicable, your supplier does not need to charge you VAT and you must both credit the output tax you would have been charged and debit the input tax you would have paid in your VAT account—resulting in net £0. This means more admin and some confusion for businesses bringing low-cost goods into the UK. Check that the country you’re dealing with is part of the EU. Details of contact addresses and other useful information provided by the VAT authorities in other member states can be found on the European Commission website. Consignment stocks are goods you dispatch to an EU country where they’re held somewhere before you finally supply them to a customer in that country. Where distance sales become more complex is when your sales reach the distance selling EU VAT threshold in a particular country. In this post, you’ll learn how export VAT is charged on goods and services in the EU and the rest of the world, with checklists to ensure your exports run smoothly. It also provides guidance on what you should do when you export goods in specific circumstances. Government issues new VAT guidance for EU imports and exports post-Brexit. You’ve accepted all cookies. services that require your intervention to be delivered), you need to charge customers the standard UK rate of VAT (currently 20%). Declare sales on your VAT return and complete an EC Sales List (VAT101 form). 6. If the customer collects them you can zero-rate the supply, unless they’re for private consumption, in which case they’re liable to UK VAT in the normal way. 4. But each country has a ‘distance selling threshold’. Top Tip: VAT exemption means that the goods or services you sell are outside of the scope of VAT and thus considered VAT exempt. You can find out what you need to do to get your business export-ready post Brexit by using HMRC’s step-by-step guide. You may have to send goods to an EU country so you can do a job there. This notice explains the conditions for zero rating VAT on an export of goods, that is, when the goods leave the EC. This can be longer for goods that need processing before export and for thoroughbred racehorses. Exports at 0% VAT: How to get VAT Refunds on Exports in UAE. The most common examples are mail order or internet sales to private individuals in an EU country. If you do not get this evidence in time, you’ll have to account for the VAT on your return. Every other type of sale is subject to VAT. There are two sides of international trade: importing and exporting. This can be commercial or official evidence. In addition to evidence that the goods have physically left the UK and EU, you’ll need to hold supplementary evidence, for example, within your accounting system, to show that a transaction has taken place. You can find out more about getting someone to help with customs on the GOV.UK website. Your EORI number is unique and valid throughout the UK and EU. You can refund the deposit if they give you the evidence that the goods have left the country within the time limit. We’ll also look at how export VAT will change after Brexit. To learn more about these distinctions, read our guides to VAT exemption and who it applies to and everything you need to know about VAT partial exemption ✅. Acceptable documents for evidence include: To ensure your exports run smoothly and you charge and pay the correct amount of VAT on goods and services exported in and outside of the EU, here are a few handy checklists to follow. A customs expert can work for you directly or indirectly to ensure your goods get through customs. The Government has published new guidance for businesses which sets out the procedures for importing and exporting goods between Great Britain and the EU from 1 January 2021. You’ll not have to account for VAT on these goods if all of the following apply: You might have a contract to supply goods that you’ve got to install or assemble on site. If you deliver the goods (or arrange for them to be delivered), they’re treated as distance sales in the country you deliver them to, and you must register for VAT there no matter the value of the sales. If you have any doubts, you should take a deposit that’s the same as the VAT that would be charged. 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