If you supply goods to another EU country these sales are technically known as dispatches or removals rather than exports.
Dispatches within the EU between VAT-registered businesses are not subject to VAT. This also applies to goods imported into the EU that have been released for free circulation following payment of import duties.
However, when you dispatch goods to someone in another EU country, who is not registered for VAT in that country, you should normally charge VAT.
Customs declarations are not generally required for goods in free circulation within the EU, but traders must remember to raise VAT invoices showing the VAT Registration Number of their customers and obtain evidence of shipment.
Important: Following the withdrawal of the United Kingdom from the European Union, there will be immediate changes to the procedures that apply to businesses trading with the EU. It would mean that the free circulation of goods between the UK and EU would cease.
Read the latest UK government guidance on trading with the EU if there’s no Brexit deal.
Read our step-by-step guide to exporting.
VAT between EU countries
If your EU customer is VAT registered and can provide you with a valid EU VAT Registration Number:
- you can apply the zero rate of VAT to the sale
- the VAT will be due in the destination country from the customer on acquisition of the goods
- you must keep paperwork that shows both the seller’s and buyer’s VAT registration numbers (with the correct national codes) on the invoice
- you must number your sales invoices in sequence
- you must also obtain and keep valid evidence that the goods have been removed from the UK within certain time limits to be able to zero rate
Read more about charging VAT.
If your buyer is not VAT registered, or you can’t obtain their VAT number, then as the seller you must charge the UK rate of VAT.
Every business trading within the EU has to declare its sales on its VAT return. If your sales of goods exceed the applicable exemption threshold during a calendar year, you must also submit Intrastat returns each month.
Every VAT-registered business trading goods with other EU member states is obliged to declare certain information. The amount of information required depends on the value of their Arrivals (purchases or imports) or Dispatches (sales or exports).
Intrastat thresholds are reviewed annually and are currently £1.5 million for Arrivals and £250,000 for Dispatches.
Read more about intrastat returns.