VAT

The Value Added Tax, or VAT, in the European Union is a general, broadly based consumption tax assessed on the value added to goods and services. It applies more or less to all goods and services that are bought and sold for use or consumption in the Community.

A zero rate of VAT applies to exported goods on condition that they are to be transported to a place outside the EU.

 

Sales within the EU

If you’re selling to a VAT-registered customer, you can zero-rate your goods as long as you:

  • include the customer’s valid VAT registration number on your VAT invoice
  • send the goods out of any EU country to somewhere else in the EU
  • keep satisfactory evidence, including commercial invoices and shipping documents, proving that the goods have left the EU country
  • hold sufficient evidence from your accounting records to prove that a transaction has taken place

 

Export outside the EU

Goods being exported outside the EU can be zero-rated as long as you:

  • ensure they leave the EU within set time limits (typically three months)
  • keep satisfactory evidence of their shipments
  • hold sufficient evidence from your accounting records to prove that a transaction has taken place