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Dispatch or export - VAT treatment

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We are a UK company, with a new customer who is based in Algeria. They have asked for our product to be delivered to their logistics company in France, via their DHL account (incoterms are EXW). The customer will then organise shipment for the product from France to Algeria. What is the VAT position on this?

We have asked the customer if they have an EU VAT number, but have not had a response yet. Because we are shipping the goods to France, is this a dispatch and therefore zero-rated for VAT (assuming we get their VAT number)? If they aren't registered for VAT in France, then do we need to charge VAT at 20%? Or, because the final destination is Algeria, do we zero-rate the sale providing we can get proof of export? 

Is VAT Notice 703, 6.6 the relevant legislation - though this refers to the customer shipping the goods direct from our premises to outside an EC member state, not temporarily stopping in the EU. 





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By paul.benny
18th Feb 2020 12:23

There is guidance on this in VAT 703 - see paragraphs 3.6 and 7.4

It's important that you do get proof of export. A pragmatic option to ensure you get this may be to standard rate the invoices and credit the VAT once you get the proof of export

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By marlasinger
19th Feb 2020 09:33

Many thanks Paul. Will ensure we receive solid proof of export.

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