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VAT Implications on international supply chains

Good day

I've come across the following situation for one of my clients and require some clarity please.

B(My Client, registered in Germany), orders goods from A(UK), who delivers them directly to C(Non EU).

B has received an invoice from A that includes UK VAT. My questions are as follows:

1. Is it correct to charge VAT on the suppy A to B?

2. If so, would B be required to register for VAT in UK.

Regards

Mark

Replies

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If the goods are delievered to a customer outside the EU then subject to the UK supplier holding evidence that the goods have left the UK he can Zero rate the supply. I would ensure that the exporter has evidence the goods have left the UK and then ask for a credit note for the VAT charged.

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Thanks for the response.

I've now received feedback, that as a result of the goods being supplid (EX-works), The suppy A to B is a domestic supply, hence A is required to charge VAT.

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Even if supplied ex works there is provision for Zero rating as an indirect export if you provide the supplier with evidence that the goods have left the UK, generally within 3 months. Look at Notice 703 para 2.11

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Thanks.

Do you know if the same would apply for exports from other EU Countries?

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Mark

The rules vary on a couintry by country basis. In some countries in the EU, an ex works sale can give rise to a VAT registration and in others local VAT charged has to be recovered through what is commonly referred to 8th Directive recovery. For Ex works sales you have to review imolications on a country by country basis.

Hope this helps!!

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Thanks very much Shaun.

Appreciate the help!

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