For a step-by-step guidance to selling services to the EU please click here: https://www.gov.uk/guidance/providing-services-to-any-country-in-the-eu-iceland-liechtenstein-norway-or-switzerland-after-eu-exit
- From 01/01/21 the supply of services to customers in the EU is treated the same as the supply of services to customers outside the EU
- VAT treatment is based on the ‘place of supply’ rules
- Place of supply rules remain broadly unchanged.
- Place of supply for B2B (business to business) transactions will usually be where the customer is located
- Place of supply for B2C (business to consumer) transactions will usually be where the supplier is located.
- Further information can be found here: https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec5
- Where the place of supply is not the UK then the supply is outside the scope of UK VAT and should only be entered into box 6 of the UK VAT return
- The reverse charge mechanism still applies and invoices should be marked as ‘reverse charged’
- Where a UK business is not registered for VAT, and reverse charge invoices are received from businesses outside of the UK, these amounts will form part of the taxable turnover when reviewing VAT registration thresholds
Click here to go back to a roundup of what you need to know about trading with the EU.
