The key UK export tax is export VAT on sales. Export VAT depends on whether you are selling within the European Unions (EU) - sometimes referred to as "dispatches" or "removals" rather than exports - or exporting to non-EU countries.
Although no other export taxes are charged in the UK, you may have to deal with local taxes overseas, including import taxes.
EU sales: exports to VAT-registered customers
Export VAT within the EU depends on whether your customer is VAT registered or not.
If you are selling to a VAT-registered customer, you should get their VAT number. You can then zero-rate the sale, so that no export VAT needs adding. You need to retain proof that the goods have left the UK, and a copy of the VAT invoice you have issued for your VAT records.
In your VAT return you must detail each VAT-registered customer and the value of goods supplied on a separate EC Sales List. Larger exporters must also provide details of their EU Sales on a separate 'Intrastat' declaration each month. You must make an intrastat declaration if the total value of the goods you:
- send to other EU countries is more than £250,000
- receive from other EU countries is more than £1,500,000
EU sales: exports to non-VAT registered customers
If the customer is not VAT-registered, you charge export VAT at the normal UK VAT rate for those goods. Again, you issue a VAT invoice showing details of the export VAT charged.
You do not need to complete an EC Sales List for sales to non-VAT registered customers, but the value of these sales is included in the Intrastat returns required from larger exporters.
However, export VAT is treated differently if the total value of your sales to non-VAT registered customers in any individual EU country during a calendar year exceeds that country's VAT distance selling threshold. These VAT thresholds vary but are typically around €35,000.
If so, you must register and account for VAT in that country, charging the local rate of VAT rather than UK export VAT.
EU sales: digital services to consumers
Since 1 January 2015, businesses providing digital services to consumers in the EU have been required to charge VAT at the rate applicable in the consumer's country under the 'place of supply' rules.
If you make digital supplies to consumers in other EU countries, you must be registered for, charge and pay VAT in each of those EU countries. Alternatively, you can use the HM Revenue & Customs VAT Mini One-Stop Shop (VAT MOSS) to comply with your reporting requirements.
VAT MOSS simplifies your reporting requirements by allowing you to submit a single, quarterly VAT return and payment for your EU digital services sales. HMRC sends your quarterly return - along with the VAT due - to each country in which you have supplied digital services.
Digital services include broadcasting services such as radio and television programmes, telecommunication services, apps and e-services including online video, music and gaming.
If you are in the UK and the place of supply is the UK, you must charge VAT at UK rates. If you are in the UK and the place of supply is not in the EU, you do not have to charge VAT or report the sale in your VAT return.
Export VAT: sales outside the EU
Export VAT is not charged on sales to customers outside the EU. You can zero-rate these exports, so long as you retain proof that the goods have been exported.
This also applies to goods exported via another EU country but ultimately to a non-EU customer. To qualify for zero-rating rather than charging export VAT, your records must include details of the final export outside the EU.
Other export taxes
Other export taxes may be payable overseas, depending on the circumstances.
For sales outside the EU, you or your customer may need to pay import duty to clear your goods through local customs.
If you have an overseas presence (eg a sales office), you may also find that you are subject to local business taxes. You should take advice on international tax planning.
Special tax rules and procedures apply if you deal in excise goods such as alcohol and tobacco products.
For further advice on exporting, see starting to export on the GOV.UK website.
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