The National Export System (NES) allows you to send export documentation to HMRC electronically. For example, let’s say Helen has a business selling t-shirts to consumers in Ireland and Germany. If you have any doubts, you should take a deposit that’s the same as the VAT that would be charged. 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. You can change your cookie settings at any time. Monitor sales of goods against distance selling EU VAT thresholds. 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. If you have customers in several different countries, this would typically mean registering and filing VAT returns in every market you operate. So if a customer from Germany uses your services while on holiday in Portugal, the sale would be subject to Portuguese VAT. Tide is here to help small business owners and sole traders save time and money. Don’t include personal or financial information like your National Insurance number or credit card details. 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. 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. 6. However, if your business sells services to consumers outside of the UK, you do need to charge VAT, depending on the type of service. This law was initially scheduled … For further information visit fscs.org.uk. It will take only 2 minutes to fill in. If you sell services to consumers in the EU, you do need to add VAT to your invoices. So instead of actually doing this, they need to declare both the output tax they would have charged you and the input tax you would have paid them in their VAT return under the same transaction, essentially cancelling each other out. 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. If … a general taxthat applies, in principle, to all commercial activities involving the production and distribution of goods and the provision of services. 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. VAT is a tax on goods used in the EU, so if goods are exported outside the EU, you do not charge VAT. We’ll also look at how export VAT will change after Brexit. 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%. If you don’t have evidence of the export, you need to account for the full rate of VAT. Whether importing or exporting, there are important VAT and duty rules and procedures. You can apply for your EORI number on the GOV.UK website. As a general rule, exports of goods to VAT-registered EU customers and exports of goods and services to customers in the rest of the world can be charged at 0% for VAT purposes. If you’ve made EU sales where you’ve charged VAT, include the value of the sales in box 1 and box 6 on your return, and pay HMRC any VAT you’ve charged in the usual way. telecommunications, broadcasting or online services), you need to charge customers at their local rate of VAT and provide invoices that comply with the country’s VAT rules. 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%. If you do not get this evidence in time, you’ll have to account for the VAT on your return. This webinar will throw light upon the following areas: 1.What qualifies as export/import of goods & services from the UAE. They are usually better off negotiating a price under the FOB incoterm and avoid worrying about the complex paperwork involved in getting a rebate on the VAT … For distance sales, you must charge VAT at UK rates in the normal way. Check that you’re applying the correct rate of VAT. Some of the changes are covered in this post, but we’ll update the content as and when new rules are rolled out. If your sale is zero-rated, your invoice should include the customer’s VAT number. The word ‘pay’ is misleading, however, because the way it is set up means they actually do not need to pay any VAT on the purchase (we’ll untangle this in a moment). 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. But each country has a ‘distance selling threshold’. You can do this through the The National Export System for export declarations. 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. In Ireland, the distance selling VAT threshold is €35,000. 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. Exports at 0% VAT: How to get VAT Refunds on Exports in UAE. Such transactions are called removals. The movable … 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 your customer isn’t registered for VAT, the transaction is classed as a ‘distance sale’ and you need to charge UK VAT. Provide the customer with a VAT invoice and keep copies of these invoices. To learn more about the most common VAT return errors, read our guide to how to avoid and rectify common VAT mistakes . 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. This post also assumes that you have basic knowledge of how VAT works. With zero-rate, any sales will still need to be reported on your VAT Return. ‘Exports’ describes sales to a country outside the UK or EU. VAT is charged on the value of the goods plus excise duty. This shouldn’t be confused with VAT exemption, whereby goods don’t have to be declared. Don’t worry we won’t send you spam or share your email address with anyone. Export VAT is a tax on goods and services provided to customers outside of the UK. Home › Blog › Small business tips › A guide to VAT rules and rates on exports. So that goods can be imported to their destination country, you need to provide customers with a commercial invoice. In order to treat the sales VAT free, the following … Certain controlled goods require an export licence or certificate. 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. Government issues new VAT guidance for EU imports and exports post-Brexit. 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. All UK registered traders have to send lists of their EU sales to HMRC. 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. You can zero rate sales of goods for export to private customers if you meet the conditions for commercial exports, or the conditions of the VAT Retail Export Scheme. When exporting goods from the RSA to any export country, you have to distinguish between two types of exports, called direct and indirect export. How Does the VAT Rebate for Exports out of China work? 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). 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. There are two sides of international trade: importing and exporting. You might have to register for VAT in that country. If your offer is digital (e.g. 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. You can ask your freight forwarder, shipping company, airline or other agent to handle the paperwork. You must also make sure the goods are exported, and you must get the evidence within 3 months from the time of sale. The value of sales to each customer, along with their VAT numbers, need to be submitted to HMRC quarterly via an EC Sales List. You can refund the deposit if they give you the evidence that the goods have left the country within the time limit. Export is zero rated. Export VAT for non-EU countries. There’s more about appointing an export agent in VAT Notice 703. Let’s break down the B2B and B2C scenarios in more detail. For goods that are exported from business to business outside the EU, VAT is not charged. However, you must keep evidence of the export, and it must fall in line with all other export laws. Your customer (the buyer) is now technically responsible for both charging output tax and paying input tax for this transaction. This means that sales to customers outside of the EU can be zero-rated. 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. The goods have to be declared at the customs when leaving the EU. 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 on goods exported is normally charged at a rate of 15% (standard rate), or 0% (zero rated). You should also keep proof of goods leaving the UK. Such … Services; If the service is supplied outside the EU it is outside the scope of VAT. 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. Remember: though sales are zero-rated, they still need to be declared on your VAT return. This card is for payments from Tide accounts. 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. Contact the tax authority in that country to check. 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. You (the supplier) must obtain and retain documentary evidence of the export. You need documentary evidence of goods leaving the UK and EU to zero rate your exports. 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. PPS holds an amount equivalent to the money in Tide current accounts in a safeguarding account which gives customers protection against PPS’ insolvency. Declare sales on your VAT return and complete an EC Sales List (VAT101 form). If the evidence is unsatisfactory, then you may have to account for VAT on the sale. 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. Check whether your client or customer is VAT registered. The VAT rules for export … You’ll need to keep several records for VAT on exports: Put your sales into Box 6 on your VAT Return. The total value of sales to EU countries should be recorded on your VAT return under ‘dispatches’ or ‘removals’. However, to be entitled to this relief, the exporter will need proof of the … The government via GOV.UK’s VAT Notice 741A Section 5.1 suggests that “if you’re a UK supplier providing services in an EU member state you should check with your customer and that member state how their rules work.”. Some EU countries have a simplified system for this but you’ll need to check with the VAT office in that country. 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. This can be longer for goods that need processing before export and for thoroughbred racehorses. 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. To increase the productivity of VAT, the Government enacted the Value Added Tax and Supplementary Duty Act of 2012. 1. This is acceptable evidence that the goods have gone abroad. Where it applies to services which you receive, you, the customer, must act as if you are both the supplier and the recipient of the services. The customer only calls for them (‘call-off’) when the goods are needed, and until this happens, you’re still considered the owner of the goods. 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. You’ve accepted all cookies. 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. It applies if your supplier belongs outside the UK even if they have a UK VAT registration number.”. Exports outside of the EU can be zero-rated, but you’ll need to provide documentation as proof that goods were transported. You can zero rate most supplies exported outside the EU, or sent to someone who’s registered for VAT in an EU country. The services provided by freight forwarding, shipping and clearing agents and port authorities are liable to VAT and providers of these services will be required to … Standard VAT rate is 15%. VAT on exports to non-EU countries. The first step for moving goods into, or … 1. You can zero rate the sale, as long as you get and keep evidence of the export, and comply with all other laws. 2. UAE - 800 82559 / Saudi - 800 2442559 / Bahrain - 800 12559 MENA You’ll need an EORI number even if you only occasionally export goods outside of the UK and EU. To help us improve GOV.UK, we’d like to know more about your visit today. VAT isn't charged on exports of goods to countries outside the EU. To confirm the details you’ve been given by a new customer, you should contact the VAT Helpline. You can submit a customs declaration yourself using the National Export System. Sections 18 (1) and (2) of the Value-Added Tax (Amendment) Act of 2020 states: “18. If you sell, supply or transfer goods out of the UK to someone in another country you may need to charge VAT on them. 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. An Economic Operator Registration and Identification (EORI) number prevents increased costs and delays when exporting goods to the rest of the world. The Tide card is also issued by PPS pursuant to license by Mastercard International. 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. Tide also offers bank accounts provided by ClearBank (ClearBank® Ltd. is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 754568). The process can also be complex. 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. 2. 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. Where distance sales become more complex is when your sales reach the distance selling EU VAT threshold in a particular country. 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. There’s no net effect as far as you’re concerned. 1. Export of goods under UAE VAT. 3. 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. 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. While your head may be spinning, GOV.UK has confidence that this is not complicated at all. You can zero rate goods you send by post to a customer who is VAT-registered in an EU country. 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). 4 Ensure eligible for export VAT exemption. This means complex customs procedures apply and the way VAT is accounted for also changes. You may also have to account for acquisition VAT in that country, and so have to register there. Goods; The goods are zero rated. How much VAT you pay or whether you’re required to pay any at all depends on what you’re exporting and where you’re exporting to. These will be needed to complete your EC Sales List. 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. The reverse charge was created as a way to simplify processing B2B transactions across borders. For EU sales you do not need to fill in a customs export declaration form. Your ‘evidence of removal’ will include a number of things like: You must keep evidence for 6 years. If this is the case, you need to register for VAT in that country and charge the local rate of VAT on sales. If you don’t already have an accountant, check out our guide on how to choose an accountant for your small business. VAT on the export of goods or services only applies within the EU. If you send goods outside the EU temporarily for exhibition, or sell goods on sale or return and they’re returned, then no sale has taken place and you do not have to pay VAT in the UK when the goods are returned. Excise goods or goods subject to customs control exported to the Channel Islands need a Single Administrative Document (SAD) declaration on form C88. Find answers to all your questions related to VAT on exports and VAT on imports and understand how these supplies behave under VAT. Your EORI number is unique and valid throughout the UK and EU. You include the sale in your VAT Return for the period when the tax point takes place. Excise duty is charged on acquisitions from within the EU as well as imports from countries outside the EU. Partnerships Executive and small business accounting advocate. services that require your intervention to be delivered), you need to charge customers the standard UK rate of VAT (currently 20%). This means that sales to customers outside of the EU can be zero-rated. Check that you’re applying the correct rate of VAT. – VAT (Value Added Tax) is referred to by different names across the world, for example USA = Sales Tax, France = TVA, Australia = GST. As a general rule, if your UK business sells services to other businesses outside of the UK but within the EU, you do not need to charge VAT but your customer (the buyer) does have to pay VAT in their own country using the reverse charge. 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. (1) Subject to subsection (2), a supply of … VAT on goods exported is normally charged at a rate of 14% (standard rated) or 0% (zero rated). But you have to operate the ‘reverse charge procedure’ when the goods come back, you charge yourself VAT, and then reclaim it in the normal way. 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 don’t, before diving into this post, read our guide to everything you need to know about VAT . Declarations are submitted electronically using the National Export System before your goods arrive at the port of 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. This makes exporting your goods quicker and easier. Although in this instance you can zero-rate the transaction within your company. Note that the local rate of VAT is the rate where the digital service is received, not where the customer is based. You zero-rate VAT on goods exported to VAT-registered people within the EU. 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