Goods traded between EU countries
VAT is payable when you buy goods from a VAT registered business in the European Union (EU) countries including within the United Kingdom. Each EU country has its own rates of VAT. In the UK there are three rates – standard rate at 20 percent, reduced rate at five percent and zero rated where you do not pay VAT at all.
If a VAT registered business in one EU country sells goods to a VAT registered business in another EU country and the buyer’s VAT registration number is obtained, then the sales is zero rated in the country of origin, the seller does not have to account for any sales tax(output tax) in relation to the supply.
The buyer (or customer) must account for VAT on the import at whatever rate is applicable to those goods in the destination country. The buyer may reclaim VAT on these imported goods.
If the buyer’s VAT registration number is not known or if the buyer is not a VAT registered company, the seller will charge VAT at the rate applicable in the country of origin.
You may check the validity of European Union VAT numbers online from HMRC website when supplying goods to EU countries.
Concise Accountancy - Helping businesses to trade outside UK
