Cross-border VAT issues

Cross-border VAT rules are complex and seeking specialist advice, to ensure both compliance and tax efficiency, is a wise move.

MGI Midgley Snelling LLP’s international tax team are ideally placed to assist firms already involved in cross-border trade or those preparing to do business abroad. Some key cross-border VAT issues include:

  • Generally speaking, goods exported outside the EU or to VAT-registered businesses within the EU are eligible to be zero-rated for VAT. The VAT on goods imported from within or outside the EU can be reclaimed
  • In general, for transactions between businesses involving services, the place of supply is generally regarded as the country where the customer is based
  • Where a business buys services from a business in another country, they must account for the VAT under the reverse charge. Where this applies, the purchasing business charges itself the VAT and then, assuming that the service relates to VAT taxable supplies that it makes, also claims it back
  • For business to non-business supplies of most services, UK suppliers charge UK VAT to overseas customers
  • UK-VAT registered businesses that supply taxable services goods or services to EU businesses, where the place of supply is the customer’s country, must complete an EC Sales List (ESL) every calendar quarter, listing these services, filing them with HM Revenue & Customs within 14 days of period end for paper returns and within 21 days for electronic returns
  • Claims for recovery of VAT incurred in other EU countries must be made via an electronic system introduced in January 2010

Our international tax team is able to advise and work with your business to ensure that their VAT systems are operating correctly and compliantly and that they are meeting all their obligations in the most VAT-efficient manner.

To find out how our international tax advisers can help you, please contact us.