Vat on Exports to EU Countries

If you sell goods to someone in the EU, you may need to charge them VAT depending on their circumstances.

Here’s what to do in some of the common circumstances UK businesses find themselves in.

A Sale by a UK VAT Registered Business to someone who is also VAT registered in another EU Country

VAT treatment: Zero Rated Supply

UK VAT Reporting Requirements: 

  • your normal VAT Return in box 6 and box 8
  • the EC Sales List (ESL)
  • the Intrastat Supplementary Declaration, if you sell over £250,000 of goods to other EU customers in a year

Information to Keep

A sale between two businesses that are both VAT registered can be zero-rated as long as the you gather together the following information:

  • The customers VAT registration number (including their 2 letter country code)
  • Keep evidence of the export (things like the order details, packing list, consignment notes)
  • Detail on your invoice/paperwork all the following:
    • your business details
    • your customer’s details
    • a detailed description of the goods and their value
    • the method of transport and route
    • where the goods are going to

Whether you choose to despatch the goods by post, courier or air you must keep all the evidence of the sale for 6 years.

That includes any airway bills and dispatch packs issued by Royal Mail.

A Sale by a UK VAT Registered Business to someone who is NOT VAT registered in another EU Country

VAT treatment: Add VAT as normal

UK VAT Reporting Requirements:

  • Include the value of the sales in box 1 and box 6 on your return, and pay HMRC any VAT you’ve charged in the usual way.
  • You won’t have to report these sales on an ESL.
  • You’ll have to complete an Intrastat Supplementary Declaration if your sales to other EU customers exceed £250,000 of goods in a year.

When a sale is made to another EU business VAT must be added as normal. 

However, you are responsible for monitoring you level of sales you supply to each country.

Once you cross a certain threshold you will need to register for VAT in that particular country. This is known as Distance Selling Thresholds.

Distance Selling Thresholds

Each EU country has its own Distance Selling Threshold – that is the level of sales you can sell into it from the UK without registering for VAT in that country. 

Once you pass that threshold you must register and report VAT within that country on the sales you make.

Learn More: Distance Selling Thresholds Explained

What are the Member Countries of the EU:

Currently the EU countries are:

  • Austria;
  • Belgium;
  • Bulgaria;
  • Croatia;
  • Republic of Cyprus;
  • Czech Republic;
  • Denmark;
  • Estonia;
  • Finland;
  • France;
  • Germany;
  • Greece;
  • Hungary;
  • Ireland;
  • Italy;
  • Latvia;
  • Lithuania;
  • Luxembourg;
  • Malta;
  • Netherlands;
  • Poland;
  • Portugal;
  • Romania;
  • Slovakia;
  • Slovenia;
  • Spain;
  • Sweden;
  • UK (for now).

It is also worth noting that HMRC calls Sales to another country inside the EU ‘dispatches’ or ‘removals’.

‘Exports’ describes sales to a country outside the EU.

Learn More: VAT on Exports to Non EU Countries

Updated 15 April 2019

Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.