Policy and Strategy, Inland Revenue. If you’re not already registered in the UK, you may be liable to register. If you are not UK VAT registered and receive the services in paragraph 5.9 supplied in the UK the reverse charge does not apply. Beijing-based PetPlus supplies around 2,000 Chinese online and offline businesses with imported pet products. Cross-border supplies (import and export) of goods and services generally entail the presence of an intermediary. This is not an export, it’s a taxable interstate transaction. From 1 December 2012 if you are not established in the UK, there is no registration threshold for taxable supplies of services. X Ltd develops a mould, Invoices i to PQR Ltd and retains it in factory for manufacture. A B2B supply of the long-term hiring of means of transport is subject to the general rule for the place of supply of services and so supplied where the customer belongs. But, if the service element becomes dominant because there is consultancy, design or diagnostic work, bespoke alteration or adaptation included in the contract, then it’s likely that you are providing a service to which the goods are incidental, for example construction or repair services. If you’re a UK supplier providing services in an EU member state you should check with your customer and that member state how their rules work. If the place of supply of your services is outside the UK or EU you should not charge UK VAT but, as you may need to account for the local tax, you’ll need to consider the tax rules of the country into which you are making your supply. This sub-paragraph applies to everything provided as part of an advertising campaign, even if elements of the campaign would have fallen under other place of supply rules or been treated as a supply of goods had they been supplied in isolation. x In Part 3 there is more detail on how the new place of supply rules will operate. In such cases the place of supply of such services depends on the nature of the services provided. ), you must declare and pay VAT on the transaction as if you had sold the services yourself, at the applicable rate in your country (using the reverse charge procedure). See also paragraph 5.14 for a possible interaction with VAT grouping and other member states. The most common forms of event are sports matches, theatrical or musical performances, conferences, exhibitions, seminars and trade shows. B2B intermediary services fall under the B2B general rule and are supplied where the customer belongs. A ltd India is sourcing goods for B Inc, outside India, Intermediary Service sourcing outside India, Till September 2019, this was taxable. Examples of work on goods which may qualify for zero rating under this section include: Examples of services which do not qualify for zero rating under this section include: To zero rate a supply of such services you must obtain and keep satisfactory official or commercial evidence of the export of the goods to a place outside the UK or EU. If you’re a UK recipient of services from a non-UK supplier the following rules apply to you. CHAPTER 15. The customer contracts to buy telecoms services through its Swiss branch, making all payments from there. If you supply training services to foreign or overseas governments your supply will be zero-rated provided both of the following conditions are met: A foreign or overseas government includes: Zero rating only applies to the supply of the actual training and does not extend to any associated services which are supplied separately, such as accommodation or transport. Read VAT Mini One Stop Shop: register and use the service for more details on scheme registration. Admission is any payment that gives an individual or group the right to attend an event. Where an overseas establishment supplies services to a UK establishment within the same legal entity, the reverse charge does not apply since this is a transaction within a single entity and so not a supply for VAT purposes. impediment to the cross-border supply of services in relation to the former Party, it may request consultations with regard to that measure. Global Cross-border E-commerce Product Types In-Depth: , Clothes, Shoes & Accessories, Health & Beauty Products, Personal Electronics, Computer Hardware, Jewelry, Gems & Watches, Industry Segmentation, B2B, B2C, C2C, Channel (Direct Sales, Distributor) Segmentation, Section 8: 400 USD? Once you have determined which rule applies you should refer to section 16 to determine whether your supply is subject to the zero rate. If you can attribute the input tax due under the reverse charge to your taxable supplies (and so can reclaim it in full) then the reverse charge has no net cost to you. They are normally regarded as resident in the country where they’ve set up home with their family and are in full-time employment. services rules are changing (including the time of supply for cross-border supplies of services subject to the reverse charge). The aim is to benefit from a lecture. x Part 5 sets out the draft time of supply … See VAT Notice 700/2: group and divisional registration. You should ask yourself ‘what am I supplying?’ or ‘what am I receiving?’. The ability to prevent, prepare for, detect, respond to, and recover from a potential incident that affects human, animal or plant health without disrupting the supply chain is of paramount importance. In other circumstances the supplier is required to register and account for VAT on the supply. For example, if you arrange services connected to land, the place of supply of your services will also be the place where the land is situated. The French establishment deals directly with the UK bank without any involvement of the UK branch. The list of commitments below indicates the services sectors liberalised pursuant to Article 172 of this Agreement, and, by means of reservations, the market access and national treatment limitations that apply to services and services suppliers of the Republics of the Where B2C services are provided in connection to cultural, artistic, sporting, scientific, educational, entertainment or similar activities these services will be taxable at the place where they are performed. Where this occurs and the service is land related, a suitable apportionment between countries should be made. Cross-Border Consumption Taxation of Digital Supplies Sample excerpt Abstract Consumption taxes such as value added tax (VAT) or goods and services tax (GST) are an important revenue source for several countries, not least within the European Union (EU) which has had a harmonized VAT since the end of the 1960s. See Claim back VAT paid in the EU if you’re established elsewhere (Notice 723A). In a EU VAT context, the “place of supply rules” govern where a particular supply takes place. For example, a foreign company established under mode 3 in country A may employ nationals from country B (mode 4) to export services cross-border into countries B, C etc. It is generally the case that the business establishment will be the most closely concerned with the supply. It also includes amusement parks, tours or visits around stately homes. Where this is the UK, the services are subject to UK VAT. These goods are warehoused under customs Later, A Ltd finds a buyer in Tamil Nadu & Sells the goods. VAT rules for supplies of digital services, VAT Mini One Stop Shop: register and use the service, VAT Notice 701/49: finance and securities, VAT on education and vocational training (Notice 701/30), VAT Notice 48: extra statutory concessions, VAT on goods exported from the UK (Notice 703), customerexperience.indirecttaxes@hmrc.gsi.gov.uk, How to fill in and submit your VAT Return (VAT Notice 700/12), Work out your place of supply of services for VAT rules, Domestic reverse charge procedure (VAT Notice 735), Coronavirus (COVID-19): guidance and support, Transparency and freedom of information releases, Services, including admission, linked to physical performance (for example, artistic, cultural, education and training, sporting, entertainment services, exhibitions, conferences, meetings), 2 or more separate contracts for the hire of the same means of transport follow each other with 2 days or less between them. Such goods will normally be treated as supplied where they are installed. On the other hand, the extension of the flow-based market coupling project to Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia in the so-called Core region has been facing recurrent delays. We’ll send you a link to a feedback form. ITC is not required to be reversed- Explanation to Sec 17(2) & Sec 17(3). x Part 4 provides further details on the time of supply changes. See Insurance (Notice 701/36) and VAT Notice 701/49: finance. x Part 5 sets out the draft time of supply … C Ltd, Chennai placed an order with a supplier in USA to supply steel. This notice assumes you have a knowledge of the principles of VAT explained in VAT guide (Notice 700). But, it is always necessary to consider all the facts. If you’re supplying installed goods you’ll need to consider the accounting procedures in section 11 of VAT Notice 725: the single market. INV029-Supply of cross-border money transfer services. The relief does not apply if services are received for business purposes. If they are not VAT registered you’ll be liable to VAT in that country and may have to register there (see paragraph 5.9). The partial exemption implications for reverse charge services are explained in Notice 706: partial exemption. Thus, from 1st October 2019 this transaction is exempt. If there are multiple supplies each will need to be considered on its own. The investigation was launched in April 2015, and was conducted pursuant to Section 46(2) of the Competition Act 2007 (the ZAct [). This notice sets out the place of supply and it follows that no UK VAT is chargeable where the place of supply is outside the UK. It does not include charges by agents for arranging the supply of admission. This is the place where the customer takes actual physical control of the means of transport (for example, where the vehicle is located when the keys are handed over). An individual has only one usual place of residence at any point in time. We use this information to make the website work as well as possible and improve government services. The reverse charge is a simplification measure to avoid the need for suppliers to register in the member state where they supply their services. Maintained by V2Technosys.com, Taxguru Consultancy & Online Publication LLP, 509, Swapna Siddhi, Akurli Road, Near Railway Station, Kandivali (East), GST on cross border Transactions – Examples & Taxability, Extended/Conditional due dates after 40th GST Council Meeting, Rs 1,04,963 crore of gross GST Revenue collected in November 2020, Weekly newsletter from Chairman, CBIC dated 01/12/2020, Quarterly Return, Monthly Payment Scheme under GST, Central Goods and Services Tax Act, 2017 As on Updated 10.11.2020, Join Certification Courses on GST, Customs & FTP and Income Tax, TCS under section 206C(1H)-A Detailed View, Due Date Compliance Calendar December 2020, Adjudication of Show-Cause Notices after 13 years is untenable in law: Bombay HC, Interest on delayed payment of TDS not allowable as business expenditure, BOT meeting will focus on new Foreign Trade Policy (FTP) (2021-26), CBIC extends levy of Anti-Dumping duty on Methylene till 31.01.2021, MCA notifies Special court in Maharashtra, WB & TN for SEBI Cases under Companies Act, 2013, Statutory and Tax Compliance Calendar for December, 2020, Extension of date of Filing of Accounts to Charity Commissioner in Maharashtra, Show Cause Notices to Taxpayers Under GST Act Mandatory to Upload on Website – Mere E-Mail is not Suffice, New GST Return Scheme for Small Taxpayers, A Ltd India company supplies to its establishment in USA, Supply of service to distinct person outside India. If the place of supply of your services is an EU member state, you or your customer may be liable to account for any VAT due to the tax authorities of that country, see paragraph 2.9. But, in some cases the customer may consider that their aim is not to attend but to gain some other benefit. The value of the transaction on which VAT must be added under the reverse charge is the total amount paid together with the value of any other form of consideration. Even if you make no taxable supplies yourself you may still be required to register if the value of general rule services received from overseas suppliers exceeds the registration thresholds. Any hire beyond this period is a long-term hire. documentation confirming cross-border supplies required according to the polish vat law Based on the local VAT legislations, some countries, including Poland, condition the right to apply the exemption from VAT or 0% VAT rate on the supplies of goods from possessing by the seller a relevant documentation confirming transportation and reception of goods by the recipient. Services which, under the place of supply rules, are supplied in another country are outside the scope of UK VAT. But, elements of telecommunications services used in the UK were ignored if they were: The exception to this rule was that if a UK resident used telecommunications services outside the EU under such an account with a UK provider, those services were outside the scope of UK VAT, provided that evidence was retained to substantiate the element of use and enjoyment that occured outside the EU. B2C services of a professional, technical, financial, intellectual or other intangible nature supplied to customers outside the UK or EU, 15. B2B supplies of such services are subject to the B2B general rule. A new online customs portal could help cross-border road freight in South-east Asia maintain volume gains made over air and Supply Chain Apply for Accreditation If you only make supplies of services in the UK to which the reverse charge does apply you are not entitled to register for VAT in the UK. You’ll need to indicate on your invoice that the supply is subject to the reverse charge and you’ll need to complete an entry on an EC Sales List with the value of the sales made and your customer’s registration number. Thailand's cross-border trade, including transit trade, fell by 4.88% year-on-year in the first nine months of 2020, spurred on by the pandemic and the slowing economy. If you are supplying land related services then the provisions of paragraph 7.6 will apply. Services supplied in the UK may be exempt, zero-rated, standard-rated or liable to VAT at a reduced rate. See VAT Notice 48: extra statutory concessions. If you have a temporary presence of human and technical resources in the UK, this does not create a fixed establishment in the UK. x In Part 3 there is more detail on how the new place of supply rules will operate. LIST OF COMMITMENTS ON CROSS-BORDER SUPPLY OF SERVICES (referred to in Article 118 of this Agreement) SECTION A COLOMBIA 1. Since 1 January 2013 the place of supply of a B2C long-term hire of means of transport is made where the customer belongs, unless it is a long-term hire of a pleasure boat that is put at the disposal of the customer at an establishment of the supplier. The services are provided and invoiced by its UK branch. The first step in applying use and enjoyment is to determine where the place of supply of the services specified above is in accordance with the other rules explained in this notice. There are special place of supply rules for certain services as follows. This covers a wide range of services of different natures. If you are installing goods on land or in a property the question will arise as to whether you are performing a land related service or installing goods. Under section 57(3) of that Act those amendments will come into force on such day as the Treasury may by regulations appoint. Goods include all forms of moveable property but exclude land, property or equipment permanently installed. Means of transport include any vehicle, equipment or device, whether motorised or not, that’s designed to transport people or goods from one place to another. The Isle of Man is treated as part of the UK for VAT purposes and VAT is chargeable in the Isle of Man (under Manx Law which generally parallels UK legislation). This is neither import nor export since goods are not entering India. Section 66 was amended by paragraph 13 of Schedule 1 to S.I. produce specific tolerances. See VAT guide (Notice 700) and section 8 for more guidance on single or multiple supplies. Speaking of partners: cross-border shippers and supply chain companies stand to recover a lot of value by partnering with third-party logistics providers, or “3PL” companies. It only applies where services are supplied in the UK by a supplier belonging overseas. The new location in Zielona Góra, on the western border of the country, offers considerable strategic advantages for cross-border retailers. An event is characterised by a gathering of people to watch or take part in an activity for a short or limited time rather than an ongoing basis. A Ltd, Maharashtra, importing oil from Singapore. a blender comprising a motor, blades and a food container) Cross border supply of elements of a patented invention 4 Contributory infringement European countries: Applicable provisions Territoriality requirements But, if a payment is made giving a right to attend the lecture it’ll be regarded as admission. Use and enjoyment does not apply where services are subject to VAT in one member state but used in another. You then include in the relevant boxes of your VAT Return the: The reverse charge does not apply to supplies of services where both the supplier and the customer belong in the UK. It does not matter how the services are delivered to a customer, which may be by electronic transmission, courier or mail. Examples include: Amongst the types of service not included as valuation services or work on goods are: For information about passenger transport see VAT Notice 744A: passenger transport and for freight transport see VAT on freight transport and associated services (Notice 744B). Such an intermediary is usually a subsidiary of the foreign principal which undertakes facilitation as well as provision of various services on behalf of the principal. This objective consideration applies even where the intended, or actual, use of the hired goods may not be as a means of transport. This is where essential day-to-day decisions concerning the general management of the business are taken. In export the basic requirement is that the goods must leave India. With one exception, B2C telecommunications services were subject to UK VAT when supplied to UK residents or used and enjoyed in the UK by visitors from countries outside the EU. You must distinguish between a supply of staff and a supply of other services which you make by using the staff yourself. A supply of staff is the placing of personnel under the general control and guidance of another party as if they become employees of that other party. 5 looks at the evidence on the extent of cross-border supply chain linkages, examining the concentration of trade in intermediates and the composition of trade by two-way traders. Whilst both are taxable in the country where the installation takes place there are differences in accounting treatment. If the place of supply is in the UK you need to consider the liability as some supplies of services may be zero-rated. This will usually be the head office, headquarters or ‘seat’ from which the business is run. For example, the services of an interior designer contracted to redesign the decor of a particular hotel would be land related. This can be either the supplier or the recipient of the arranged supply (and in some cases may be both). Short-term hire means a continuous period not exceeding 90 days if the means of transport is a vessel and not exceeding 30 days for any other means of transport. If, in anticipation of export to a place outside the UK or EU, you zero rate your supply under this item but, in the event, the goods are used in the UK or EU before export or export does not take place, you’ll need to reconsider both the place of supply of your services and, if it’s the UK, the appropriate VAT rate that applies. More details are available at VAT: how to report your EU sales. The term of the first contract needs to be considered to decide whether the second term is short-term or long-term. You’ll need to include the full title of this notice. The Scope of UNECE standards. A customer has a business establishment in the UK and fixed establishments in a number of other countries. To decide whether goods that you hire are a means of transport you must consider the actual nature and design of the hired goods. Services supplied in the UK may be exempt, zero-rated, standard-rated or liable to VAT at a reduced rate. This will be the case even where the branch creates an internal charge to the business and other fixed establishments. Section 6 presents evidence on the level of dynamism amongst cross-border traders by calculating the frequency with which products are introduced and dropped. If you belong in the UK but are not already UK VAT registered and you receive supplies of B2B general rule services from overseas suppliers (that are treated as supplied where the recipient belongs), the value of those supplies must be added to the value of your own taxable supplies when determining whether you should be registered for UK VAT. It’s unlikely that all the information in this notice will apply to you, so you do not need to read it all from beginning to end. The use and enjoyment rules are intended to make sure taxation takes place where services are consumed where either services are consumed within the UK but would otherwise escape VAT, or they would be subject to UK VAT when consumed outside the UK and EU. Such evidence should be kept as part of your records. It covers place of supply and related aspects. Advertising or promotional messages may be disseminated in numerous ways. In most cases this will be clear, such as a ticket to attend a football match or the theatre. Buying services from another EU country. B2B supplies means supplies made to businesses. Find out how HMRC uses the information we hold about you. This notice explains how to determine the place of supply of your services and how to deal with supplies of services which you receive from outside the UK. All other B2B services are determined under the general B2B rule. If the extension means that it exceeds the 30 or 90 day period, the place of supply is determined by the long-term hire rule, unless it can be satisfactorily demonstrated that the circumstances leading to the events were outside the control of the parties involved. If you are still unhappy, find out how to complain to HMRC. VAT registration numbers are the best evidence that your EU customer is in business. When supplied in the UK, the hire of certain ships and aircraft is zero-rated, see Ships, aircraft and associated services (Notice 744C). Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. In order to submit a comment to this post, please write this code along with your comment: c8b1e27b6d84d2e9a65dfd5851fd92a3.
2020 cross border supply section