Note: ⚠️ The information in this post is correct up to 31 December 2020. However, if your business sells services to consumers outside of the UK, you do need to charge VAT, depending on the type of service. When this happens, your supply takes place in the country where you install or assemble the items. If you only sell exempt services you are considered a VAT exempt business, but if you sell some exempt and some taxable goods or services you are considered a partially exempt business. If the value of your sales to that country is over this limit, you must register for VAT in that country, and charge their rate of VAT on sales to that country. These will be needed to complete your EC Sales List. The VAT rules for export … A supply of services shall be zero-rated if all of the following conditions are met: the services are supplied to a recipient outside GCC State and who is “outside the UAE’’ at the time the services are performed; the services are not supplied directly to; … If you have customers in several different countries, this would typically mean registering and filing VAT returns in every market you operate. In general terms, VAT is payable on all imports at the same rate that would apply to the product or service in the UK. For goods that are exported from business to business outside the EU, VAT is not charged. Thankfully, HMRC’s VAT Mini One Stop Shop (VAT MOSS) scheme saves you the hassle and increased workload by allowing you to register and pay VAT on export sales to HMRC instead. Some EU countries have a simplified system for this but you’ll need to check with the VAT office in that country. In order to treat the sales VAT free, the following … Partnerships Executive and small business accounting advocate. Your EORI number is unique and valid throughout the UK and EU. Declare details of your sales on your VAT return. 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. Any goods sent outside of the EU must be declared on an export declaration to get your items through customs. You must also make sure the goods are exported, and you must get the evidence within 3 months from the time of sale. The movable … 4 Ensure eligible for export VAT exemption. – VAT (Value Added Tax) is referred to by different names across the world, for example USA = Sales Tax, France = TVA, Australia = GST. If the customer arranges to collect them from you (an indirect export), you may be able to zero rate the sale as long as you meet certain zero rating conditions. Top Tip: VAT exemption means that the goods or services you sell are outside of the scope of VAT and thus considered VAT exempt. The total value of sales to EU countries should be recorded on your VAT return under ‘dispatches’ or ‘removals’. If you’re sending goods to someone who is VAT-registered in a destination EU country, you can zero rate the supply for VAT purposes, as long as: To account for the VAT on zero-rated sales to an EU country, include the value of the goods and services in your VAT Return. So that goods can be imported to their destination country, you need to provide customers with a commercial invoice. The Tide card is also issued by PPS pursuant to license by Mastercard International. However VAT looks to your business, it’s important to get it right to ensure that a) you’re complying with HM Revenue & Customs (HMRC) and local laws in the countries you operate in, and b) you’re able to reclaim the correct amount of tax on your VAT return. You can find this by looking up your product in, The customs procedure code (CPC). 8. Excise duty is charged on acquisitions from within the EU as well as imports from countries outside the EU. Export sales are exempt from UK VAT. An Economic Operator Registration and Identification (EORI) number prevents increased costs and delays when exporting goods to the rest of the world. Such transactions are called removals. 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 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. The biggest change as far as VAT is concerned is that exports to the EU will be treated in the same way as international trade exports, which means you can charge VAT at 0%. How Does the VAT Rebate for Exports out of China work? Excise duty is charged on fuel, alcohol and tobacco products. 3. Goods delivered from the UK to a destination elsewhere in the EC are not exports for VAT purposes. The goods which attract VAT at importation are classified as such in the … VAT isn't charged on exports of goods to countries outside the EU. 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. To confirm the details you’ve been given by a new customer, you should contact the VAT Helpline. October 19, 2020 1. Besides these rates there are several reduced rates, locally called Truncated Rates, for service sectors ranging from 1.5% to 10%. 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. Standard VAT rate is 15%. If your offer is digital (e.g. CPCs can be found on the, Proof of VAT or tax registration in your country of domiciliation, Proof of existence form the national company register, Custom declarations for goods exported to the EU (these currently only apply to exporting goods to the rest of the world). It also provides guidance on what you should do when you export goods in specific circumstances. This is acceptable evidence that the goods have gone abroad. You are able to make supplies to EC customers without VAT so long as your EC customer meets all the necessary criteria. This card is for payments from Tide accounts. If you sell goods, check the EU VAT thresholds for each country in case you need to register for VAT and apply the local VAT rate on sales. You can use an online interactive tool to check if a VAT number for an EU country is valid. This makes exporting your goods quicker and easier. This guide and the links we’ve included will help you do that, ensuring you stay on the good side of the tax collector and reclaim the correct amount of money you’re owed. This law was initially scheduled … The process of recording the value of exports on your VAT returns will stay the same. 2. You need documentary evidence of goods leaving the UK and EU to zero rate your exports. 1. There’s no net effect as far as you’re concerned. For further information visit fscs.org.uk. VAT: how to work out your place of supply of services Understand the 'place of supply' and which country's VAT rules to use when supplying services abroad . Tide is not a bank, the Tide current account is an e-money account provided by Prepay Solutions (PPS), a trading name of Prepay Technologies Ltd which is an electronic money institution authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 (FRN 900010) for the issuing of electronic money. 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’. VAT: how to report your EU sales How VAT … You may also have to account for acquisition VAT in that country, and so have to register there. It is important for importers, exporters, freight forwarders and shipping and clearing agents to be aware of the changes brought about by the introduction of VAT. Input VAT on Exports. Every other type of sale is subject to VAT. From 1 January 2021, rules on exports will change to reflect Britain’s new status as a non-EU member. From 1 January 2021, new rules and rates on exports will come into effect to reflect Britain’s post-Brexit relationship with the EU. You may have to send goods to an EU country so you can do a job there. Currently, the EU has 27 members: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Spain and Sweden. We’ll also look at how export VAT will change after Brexit. Export value-added tax (VAT) is a tax that is added to goods or services you sell to customers outside of the UK. Zero rate means that the goods are still subject to VAT, but the rate you must charge is 0%. Exports at 0% VAT: How to get VAT Refunds on Exports in UAE. 5. If you use courier or fast parcel services, you’ll normally be given an airways bill number for each shipment. For example, if you’re providing construction services, you won’t have to register for Intrastat. 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. If your sale is zero-rated, your invoice should include the customer’s VAT number. You’ll not have to report these sales on an ESL. Consignment stocks are treated as supplied in the UK and liable to UK VAT unless you’re also registered for VAT in the EU country that they’re sent to, in which case they can be zero-rated (as long as you meet all the usual conditions). In these cases, VAT is charged and due in the country of import and you don't need to declare any VAT as an exporter. Declare sales on your VAT return and complete an EC Sales List (VAT101 form). If you plan to export goods to countries outside the EU you must get an Economic Operator Registration and Identification number (EORI) to deal with EU Customs authorities. This is only required for goods. You can zero rate the sale, as long as you get and keep evidence of the export, and comply with all other laws. VAT on the export of goods or services only applies within the EU. Therefore, HMRC recommends that you get someone to deal with customs declarations for you, such as a freight forwarder, custom agent or broker or fast parcel operator. While each country has specific documents they’ll ask you to supply, in general, to register for VAT you’ll be asked for: 1. SARS has, subsequent to the introduction of VAT, issued a Practice Note detailing the documentation requirements and a Government Notice outlining the VAT Export … This is similar to a sales invoice and should include the following basic information: Keep copies of all commercial invoices for your own records. If you have customers abroad, you may need to charge VAT on the goods and services you … For distance sales, you must charge VAT at UK rates in the normal way. Exporters of goods and services are hereby notified that effective October 1, 2020 there will be no imposition of Value Added Tax (VAT) on exports. Otherwise, they’ll give you a customs dispatch pack receipt copy. Check that you’re applying the correct rate of VAT. If this is the case, you need to register for VAT in that country and charge the local rate of VAT on sales. Find out if VAT is due when you sell, supply or transfer goods out of the UK, and about zero-rated goods, proof you must keep and which forms to fill in. 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. To fulfil your customs and duty obligations to HMRC, you’ll need to complete a Single Administrative Document (SAD) also known as form C88. You might have to register for VAT in that country. Be the first to hear about our webinars, new features and business tips to help you save time and money. 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. 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. What are … Exports include Swedish companies’ sales from branches in other countries, sales of goods to export shops, and sales in Sweden to private individuals residing outside the EU, referred to as “tax-free sales.” VAT rules for countries and certain regions. You can change your cookie settings at any time. This post also assumes that you have basic knowledge of how VAT works. You can zero rate the sale, as long as you get and keep evidence of the export, and comply with all other laws. This means that sales to customers outside of the EU can be zero-rated. Tide, the Tide logo, the Swell, and Do less banking are trademarks and trade names of Tide Platform Limited, and may not be used or reproduced without consent of the owner. While this article is not about VAT on imports, if you do find yourself in this situation when filing your VAT return, as described in section 5.2 of the same notice, you simply include in the relevant boxes the: Top Tip: Filing your VAT return isn’t always straightforward. If you sell, supply or transfer goods out of the UK to someone in another country you may need to charge VAT on them. Contact the tax authority in that country to check. 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. August 31, 2018. Your customer (the buyer) is now technically responsible for both charging output tax and paying input tax for this transaction. 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). If you sell services to consumers in the EU, you do need to add VAT to your invoices. But you’ll have to complete an Intrastat Supplementary Declaration if your sales to EU customers are more than £250,000 worth of goods in a year. Under Part One, the supplying vendor will charge output tax at the standard rate of 14% on the supply of the movable goods to the qualifying purchaser. VAT on exports to non-EU countries VAT is a tax on goods used in the UK and EU, so if goods are exported outside the UK and EU, you do not charge VAT. 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. However, you’ll need third-party software. You must also make sure the goods are exported, and you must get … Ultimately, the reverse charge is a complicated solution to a very simple reality: you do not need to charge VAT on export services and your customer does not need to pay VAT on import services bought from within the UK to EU countries and vice versa. 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. Sections 18 (1) and (2) of the Value-Added Tax (Amendment) Act of 2020 states: “18. Whether importing or exporting, there are important VAT and duty rules and procedures. This only applies to goods, so if your business provides services you don’t need to worry about registering unless your business also supplies goods as part of a contract for services. When exporting goods from the RSA to any export country, you have to distinguish between two types of exports, called direct and indirect export. If you sell goods or services to someone who is not VAT-registered in an EU country, you must charge VAT in the normal way, just as you would for a UK customer. If you’re holding call-off stocks for a customer but cannot meet these conditions, you must treat them as consignment stocks. If you don’t, before diving into this post, read our guide to everything you need to know about VAT . This can be longer for goods that need processing before export and for thoroughbred racehorses. You’ll need to keep several records for VAT on exports: Put your sales into Box 6 on your VAT Return. We’ll send you a link to a feedback form. Export VAT is a tax on goods and services provided to customers outside of the UK. 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