The EU Commission has produced a VAT Directive which outlines the legislative principles that must be adopted by all EU member states in respect of the VAT treatment of sales of goods and services within the EU. The VAT directive is often referred to as the Principal EC VAT Directive 2006/112/EC. HMRC has enacted the EU legislation in various sections of VATA 1994 and other Statutory Instruments. The main points regarding the VAT treatment of supplies of goods within the EU has been outlined below.
This note should be read in conjunction with the EU ― specific transactions, EU ― acceptable evidence of removal, Distance selling, Call off stock, consignment stock and transfers of own goods, and Triangulation guidance notes.
What information is required to determine the correct VAT treatment?
A sale of goods within the EU is commonly called an 'intra EU dispatch' or ‘intra-community movement’ and the business needs to have the following information in order to determine the correct VAT treatment of the EU sale:
- the location of the goods at the time of the sale
- the delivery address of the goods (this may not be the same as the customer's address)
- the country where the customer is located (this is usually the taken from the trading address provided by the customer)
- the customer's EU VAT registration number (certain customers may have more than one VAT number so the business needs to ensure the VAT number that the customer requested is quoted on the sales invoice)
For a guide to help determine the correct VAT treatment of supplies of goods within the EU, see the Flowchart ― VAT treatment of supplies of goods within the EU.