For example, a customer may attend an educational seminar or class to learn about a subject. This includes both finished commodities and raw materials but not immoveable property such as land or permanently installed goods as described in section 7. It does not matter how the services are delivered to a customer, which may be by electronic transmission, courier or mail. Section 10(2) of the VAT Act suggests that supplies made by NRCs to Nigerian entities would only be taxable in Nigeria if the NRCs supply the goods or services in Nigeria. 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. If you supply services that directly relate to land, the place of supply of those services is where the land itself is located, irrespective of where you or your customer belongs or whether they’re in business or not. If, as either the supplier or the recipient of services, you have establishments in more than one country, it is essential to determine which of those places is treated as making or receiving the supply in question. But, if the same supplier was contracted to create a corporate colour scheme or style for a hotel chain to use in their own properties, those design services would not be land related. Effective use and enjoyment takes place where a recipient actually consumes services irrespective of the contractual arrangements, payment or beneficial interest. Once an individual has been granted leave or permission to remain in the UK, they belong in the UK, even if they overstay. 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 you are supplying land related services then the provisions of paragraph 7.6 will apply. The service will be land related if, when installed or assembled, the goods become a fixture of the land or property that cannot be easily dismantled or moved. A UK supplier contracts to supply advertising services. A ltd India is sourcing goods for B Inc, outside India, Intermediary Service sourcing outside India, Till September 2019, this was taxable. It therefore excludes the training of personnel from government owned industries or sponsored commercial organisations such as state airlines or nationalised industries. In such circumstances, provided your customer can demonstrate that they have business activities (such as by providing a VAT number), the place of supply is determined by where the customer belongs. These sections were amended by paragraphs 59 and 60, Part 1 of Schedule 8 to the Taxation (Cross-border Trade) Act (c. 22). If you supply telecommunications, broadcasting or electronically supplied services on a B2C basis you should refer to sections 14 and 15. If there are multiple supplies each will need to be considered on its own. Section 66 was amended by paragraph 13 of Schedule 1 to S.I. Where the place of supply of your services is outside the UK, you should make sure that your records contain enough evidence that this is the case. If you supply B2C services of arranging a supply which is supplied in an EU member state and your customer is not EU VAT registered or otherwise in business, you may be liable to register for VAT in that member state. 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. All other B2B services are determined under the general B2B rule. You can change your cookie settings at any time. Work on goods for export from the UK and EU is zero-rated provided that all of the following conditions are met: If your supply is zero-rated in anticipation of export outside of the UK or EU but the good are not in fact exported, you will need to reconsider the liability and adjust the VAT. Examples of services excluded from this description are the supply of: This covers entering into agreements not to pursue or undertake any business activity and or refraining from exercising, or relinquishing, intellectual property rights. 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. A Ltd, Maharashtra, importing oil from Singapore. Payments for their services are often described as commission. It also explains how to deal with supplies of services which you receive from outside the UK. Cross-border supplies (import and export) of goods and services generally entail the presence of an intermediary. But, if a payment is made giving a right to attend the lecture it’ll be regarded as admission. VAT MOSS is an optional, simplified, way of declaring VAT on B2C supplies of digital services in EU member states where you are not established. CHAPTER 15. Sales of pet products on Alibaba Group Holding’s e-commerce platform Tmall Global surged by over 90 percent from January to July year on year, according to data released by Tmall Global. Where a journey involves both intra-EU and international legs the journey is divided up into the stages between those that are between EU countries and those that are not. GST to be charged @1%- NN-41/2017-IGST(R)– if conditions are fulfilled, Supply by E2 to ABC Ltd (Dubai)- Export of goods ITC eligible, As a part of their arrangement 5% value of goods sourced by A Ltd shall be paid. This means that if you make any supplies of services taxable in the UK, to which the reverse charge (see section 5) does not apply, you must register for VAT here (unless you are eligible to use a special accounting scheme such as the MOSS) - see section 15), and account for any UK VAT to HMRC. 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 are a supplier who does not belong in the UK, and your customer is not registered for UK VAT or does not belong in the UK, you are responsible for accounting for any UK VAT due on your supply. It does not apply if a supply of services has only an indirect connection with land, or if the land related service is only an incidental component of a more comprehensive supply of services. When a supplier uses employees to provide whatever service they are contracted to supply (under a contract for services) to a customer, it is not a supply of staff by the supplier but a supply of other services. Services supplied in the UK may be exempt, zero-rated, standard-rated or liable to VAT at a reduced rate. This is because the services are not for the needs of a specific branch. 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 puts you in the same position as if you had received the supply from a UK supplier rather than from one outside the UK. We use this information to make the website work as well as possible and improve government services. If the first contract is genuinely of a short-term hire it will remain so. M Ltd, only manufactures Salt (which is exempt from GST) and sells them domestically as well as exports it. An individual has only one usual place of residence at any point in time. GST: Cross border supplies 1. services rules are changing (including the time of supply for cross-border supplies of services subject to the reverse charge). Examples of ancillary services would include the charges for the use of cloakroom or sanitary facilities. Such services can only be subject to tax in that country. Our findings are detected in all three major financing markets - equities, syndicated loans, and public debt - as well as for cross-border capital flows in M&A deals. Article 15.1: Definitions. The following are examples of services that are seen as being admission to an event: The following are examples of services that would not be seen as admission to an event: Services ancillary to admission are those that are supplied to a person attending an event for separate payment and are directly connected to the admission. Information has been updated in section 14 to reflect changes to the VAT rules for supplies of digital services and the eligibility for non-EU businesses to use the VAT Mini One Stop Shop (VAT MOSS). 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. Find out how HMRC uses the information we hold about you. It includes vehicles designed to be pulled, drawn or pushed by other vehicles. You should give your UK VAT registration number and confirm you belong in the UK to your supplier as evidence that they’re not liable to account for any UK VAT due. If there is a single supply directly related to land this treatment covers all the elements that make up the supply. If you supply services, you may recover (subject to the normal rules) input tax related to: A business that incurs VAT in a member state different to where they are based may be able to claim a refund of that VAT. The use and enjoyment rules apply in either of the following situations where the place of supply would be: In these circumstances, the place of supply is where their effective use and enjoyment takes place. But, in some cases the customer may consider that their aim is not to attend but to gain some other benefit. If you receive a supply to which the reverse charge applies and yet your non-UK supplier issues a VAT invoice on a UK VAT registration, you must still apply the reverse charge as it is not an optional adjustment. To help us improve GOV.UK, we’d like to know more about your visit today. The supplies are received at the overseas establishment. Advertising or promotional messages may be disseminated in numerous ways. The B2B general rule for supplies of services is that the supply is made where the customer belongs. For example, a yacht is a means of transport even if it’s to be used for racing, as is a train which may be leased to a transport museum. The place of supply rules contain default or ‘general’ rules, one for supplies to business customers B2B and one for supplies to consumers B2C. More guidance on this issue can be found at Revenue and Customs Brief 18 (2015): VAT grouping rules and the Skandia judgement. 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