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VAT – Making sales to the EU

When you operate a UK business, selling goods to the EU may be a positive sign of growth and success for your business. It is very important that you understand the rules and requirements on how to account for these sales because cross-border transactions can differ hugely from those from intra-UK sales.

Typically, sales made within the UK to a consumer / business will attract UK VAT. The rate of VAT that applies would depend on the type of good or service being provided.

Sales made to non-UK based consumers or business differ as follows; the treatment of VAT on your sales also depends on whether your consumer is VAT Registered or not.

If you make a sale to a VAT registered business that is not a UK resident, you should zero-rate the supply of those goods as long as the sale meets the following:

  • Goods are physically removed from the UK to another EU country (including                evidence of the removal of these goods),
  • Your customer is genuinely VAT registered in another EU country,
  • You show their VAT number on the invoice raised,
  • The dispatch and removal of goods from the UK occurs within a set time period            (usually 3 months).

With these types of sales, you do not have to register for VAT in the country of your consumer.

Those sales made to non-VAT registered individuals in the EU, and for those goods that you are responsible for the delivery, are known as ‘distant sales’. This is most commonly mail order or internet sales. On these types of sales, you would charge VAT in the normal way as if they were a UK based individual.

The main issue to be wary of is if your total sales under this ‘distance selling’ to a particular country exceeds their threshold you will then be liable to register for VAT in that country. The list of thresholds can be found here: http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/distance_selling/index_en.htm).


The information above is for general guidance only and does not constitute advice. You are advised to seek advice from a relevant professional before acting on any of the points contained herein.