International VAT

International VAT

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We’ve been having a bit of a debate in the office and can’t really find anything concrete online so was wondering anyone could quickly shed some light?

Can anyone confirm whether the following points are correct or not?

  • A standard rated supply is made within the EU as a distance sale – VAT must be charged on the supply and VAT must be charged on postage costs?
  • A standard rated supply is made within the EU to a VAT registered business – The supply and postage can be zero rated?
  • A mixed supply is made within the EU as a distance sale – VAT must be charged on the standard rated goods and VAT is apportioned by the mix of goods against the postage costs?
  • A standard rated supply is made outside the EU as a distance sale – The goods and the postage is zero rated?

Thanks.

Tom

Replies (2)

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By Steve Kesby
28th May 2015 12:22

There is no supply of postage

In each case you are making a supply of goods. You are charging Z for those goods, where Z has been determined by adding X and Y together; with X being the amount that YOU consider that you are charging for the goods themselves and Y is the amount that YOU consider you are charging for posting those goods to the customer.

There is a supply of goods for which the consideration is Z. Z is the amount by reference to which any VAT liability is calculated.

Under bullets two and four the supply of goods is zero-rated. Under bullet 1 the supply is standard-rated (subject to not exceeding the distance selling thresholds in the country to which the goods are being sent).

Under bullet 3 Z must be apportioned between the standard-rated goods and the non-standard-rated goods. That must be done according to the constituent parts of X. Call them S and N. Z x S/(S + N) is the standard-rated component.

The same principle applies to any charge made for the customer using a credit card.

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By TomACCA
28th May 2015 12:28

That's great.  Thank you

That's great.  Thank you Steve.

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