For the purposes of this rule, goods are all forms of tangible moveable property. Thailand's cross-border trade, including transit trade, fell by 4.88% year-on-year in the first nine months of 2020, spurred on by the pandemic and the slowing economy. The services are those that have an advisory nature with a high degree of intellectual character. A registered office alone is not sufficient to create a business establishment. The aim is to benefit from a lecture. Subject to certain conditions being met, a cross-border supply can be zero-rated as a supply in the member state of dispatch. If the supplier belongs outside of the UK and you, the business customer, belong in the UK (and are VAT registered in the case of hire of means of transport), it’s you, the customer that accounts for the VAT using the reverse charge procedure (see section 3). Such evidence should be kept as part of your records. Supplies to visitors from countries outside the EU are no longer subject to UK VAT. If you supply services relating to land in an EU member state, you may be liable to register for VAT in that member state. Examples of acceptable evidence of export are contained in VAT on goods exported from the UK (Notice 703). 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. UNECE Standards have a. simple structure (standard format) with. The term of the first contract needs to be considered to decide whether the second term is short-term or long-term. If a service is provided to multiple specific sites in different countries it may still be directly related to land. A supply of goods agreement for use in a cross-border context drafted from the point of view of a supplier resident in the UK who is selling goods to a customer resident in another country. The firm purchases directly from overseas sources and cooperates with local bonded warehouses to deploy a cross-border supply chain to efficiently meet demand. This notice deals only with the place of supply of land related services. Goods include all forms of moveable property but exclude land, property or equipment permanently installed. Intermediaries may be referred to as brokers, buying or selling agents, go-betweens, commissionaires or agents acting in their own name. If you are not already registered in the UK, you’ll probably be liable to register. Examples of such customers are government departments, local or municipal authorities and similar public bodies. x In Part 3 there is more detail on how the new place of supply rules will operate. If you have a temporary presence of human and technical resources in the UK, this does not create a fixed establishment in the UK. VAT registration numbers are the best evidence that your EU customer is in business. LISTS OF COMMITMENTS ON CROSS-BORDER SUPPLY OF SERVICES SECTION A EU PARTY 1. From 1 January 2015, these rules changed for B2C cross-border supplies … See VAT guide (Notice 700) and section 8 for more guidance on single or multiple supplies. ?Trend (2020-2025), Section 9: 300 USD? If your contract is to supply standard goods, without any alteration to meet the specification of the client, which you are contracted to install or assemble, either by you or someone acting on your behalf, you are providing goods to which the installation service is ancillary and is therefore treated as a supply of goods, for example the supply of studio recording equipment, where the supply involves the installation of the equipment at the customer’s studio. Services covered by this section are those that relate to an event or physical performance. This includes any taxes levied abroad. There are different rules depending on whether you’re supplying services to consumers B2C or business B2B. Emissions allowances under the EU Emissions Trading Scheme (EU ETS), and instruments representing emission reductions, carbon credits, and certificates that identify that the production of energy has been generated from renewable sources include, but are not limited to: Verified Emission Reductions (VERs) are currently considered to be outside the scope of VAT. The reverse charge also applies if you are UK VAT registered, belong in the UK and receive B2B supplies of the services listed below which are supplied in the UK by a supplier who belongs outside the UK. For example, the services of an interior designer contracted to redesign the decor of a particular hotel would be land related. In other circumstances the supplier is required to register and account for VAT on the supply. As per Section 13(8)- POS in case of intermediary is place where the intermediary is located. For example, a foreign company established under mode 3 in country A may employ nationals from country B (mode 4) to export services cross-border into countries B, C etc. If you’re a UK supplier providing services in an EU member state you should check with your customer and that member state how their rules work. From 1 January 2010 to 31 December 2012, B2C supplies of the long-term hire of means of transport were subject to the general rule for the place of supply of services and so made where the supplier belongs. A company which has its business establishment overseas contracts with private individuals in the UK to provide information. It’s unlikely that all the information in this notice will apply to you, so you do not need to read it all from beginning to end. With one exception, B2C telecommunications services were subject to UK VAT when supplied to UK residents or used and enjoyed in the UK by visitors from countries outside the EU. If the recipient of the service is VAT registered in the country where the land is, they should use the reverse charge procedure to bring the VAT to account. Where VAT is charged in error by a UK supplier, the error should be corrected by the supplier and not claimed through the refund mechanisms or UK VAT Return of a non-established taxable person. 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. CROSS-BORDER TRADE IN SERVICES. 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. Any hire beyond this period is a long-term hire. 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. The French company also has a fixed establishment in the UK created by a branch. Find out how HMRC uses the information we hold about you. LIST OF COMMITMENTS ON CROSS-BORDER SUPPLY OF SERVICES (referred to in Article 118 of this Agreement) SECTION A COLOMBIA 1. But the COVID-induced shutdown has negatively affected the cross-border relationship. Your supplier is liable to account for any UK VAT due. 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. Where you have no fixed business established in the UK and EU, the place of supply will be where the consumer is located. Maintained by V2Technosys.com, Taxguru Consultancy & Online Publication LLP, 509, Swapna Siddhi, Akurli Road, Near Railway Station, Kandivali (East), GST on cross border Transactions – Examples & Taxability, Extended/Conditional due dates after 40th GST Council Meeting, Rs 1,04,963 crore of gross GST Revenue collected in November 2020, Weekly newsletter from Chairman, CBIC dated 01/12/2020, Quarterly Return, Monthly Payment Scheme under GST, Central Goods and Services Tax Act, 2017 As on Updated 10.11.2020, Join Certification Courses on GST, Customs & FTP and Income Tax, TCS under section 206C(1H)-A Detailed View, Due Date Compliance Calendar December 2020, Adjudication of Show-Cause Notices after 13 years is untenable in law: Bombay HC, Interest on delayed payment of TDS not allowable as business expenditure, BOT meeting will focus on new Foreign Trade Policy (FTP) (2021-26), CBIC extends levy of Anti-Dumping duty on Methylene till 31.01.2021, MCA notifies Special court in Maharashtra, WB & TN for SEBI Cases under Companies Act, 2013, Statutory and Tax Compliance Calendar for December, 2020, Extension of date of Filing of Accounts to Charity Commissioner in Maharashtra, Show Cause Notices to Taxpayers Under GST Act Mandatory to Upload on Website – Mere E-Mail is not Suffice, New GST Return Scheme for Small Taxpayers, A Ltd India company supplies to its establishment in USA, Supply of service to distinct person outside India. A service is normally regarded as being used and enjoyed where the customer consumes the service. B2B supplies means supplies made to businesses. make supplies of services to customers outside the UK, receive services from suppliers that belong outside the UK, belong outside the UK and have customers in the UK, section 7A of the VAT Act covers the general rule for business to business (, section 8 of the VAT Act covers the accounting mechanism for supplies received from outside the UK and EU - the ‘reverse charge’ procedure - see, section 9 of the VAT Act covers where a person is regarded as belonging for VAT purposes - see, schedule 3B of the VAT Act covers the special scheme for non-EU suppliers of digital services within the non-Union VAT Mini One Stop Shop (VAT, schedule 3BA of the VAT Act covers the Union VAT, schedule 4A of the VAT Act covers the rules for specific types of services - see the table in, schedule 6 paragraph 8 of the VAT Act covers the valuation of services within the reverse charge procedure - see, schedule 8 group 7 of the VAT Act covers the zero rating provisions for international services - see, the zero rating of certain intermediary services, in the UK or a member state of the EU, that supply is subject to the VAT rules of that member state and not those of any other country – member state supplies are said to be ‘outside the scope’ of UK VAT, outside the UK or EU, that supply is made outside the UK or EU and is therefore not liable to VAT in any member state (although local taxes may apply), such supplies are said to be ‘outside the scope’ of both UK and EU VAT, charity, government department or other body which has no business activities, ‘person’ (natural or legal) who receives a supply of services wholly for a private purpose, supplies made outside the UK which would be taxable if they were made in the UK, supplies of certain insurance, financial, and other exempt services made to a person outside the UK (‘specified supplies’), see, a business establishment in the UK and no fixed establishment elsewhere that’s more closely connected with the supply, a business establishment outside the UK and a fixed establishment in the UK that’s most directly connected with the supply, no business or fixed establishment anywhere, but your usual place of residence is the UK, an overseas business that sets up a branch comprising staff and offices in the UK to provide services - the UK branch is a fixed establishment, a company with a business establishment overseas that owns a property in the UK which it leases to tenants - the property does not in itself create a fixed establishment, but, if the company has UK offices and staff or appoints a UK agent or representative (such as a subsidiary company acting on their instructions) to carry on its business, this creates a fixed establishment in the UK, an overseas business has contracts with UK customers to provide services; it has no human or technical resources in the UK and therefore sets up a UK subsidiary to act in its name to provide those services - the overseas business has a fixed establishment in the UK created by the agency of the subsidiary, a UK company that acts as the operating member of a consortium for offshore exploitation of oil or gas using a fixed production platform - the rig is a fixed establishment of the operating member, an overseas company that registers or is incorporated at its accountant’s address but has no other offices or staff in the accountant’s country, an overseas television company that sends staff and camera equipment to the UK for a week to shoot a documentary before returning home, a team of builders and contractors that are temporarily in the UK to carry out a one-off construction project, the presence of computer servers alone within a country, the existence of a UK VAT registration without any supporting resources in the UK, a person who lives in the UK, but commutes to Ireland daily for work, belongs in the UK, overseas forces personnel on a tour of duty in the UK live in rented accommodation with their families and have homes overseas to which they periodically return to on leave - they belong in the UK throughout their tour of duty, obvious use of your services at a particular establishment (for example, the lease of equipment for use at that establishment), taking your instructions from a particular establishment, the service relating to business being conducted by your customer in an establishment in a particular country (such as written reports or accounts), making any supplies of goods or services to a particular establishment, the supply is not exempt (this includes exempt supplies subject to an option to tax), for supplies not within the general rule, you’re VAT registered in the UK, amount of output tax in box 1 (VAT due on sales), amount of input tax in box 4 (VAT reclaimed on purchases), full value of the supply in box 6 (total value of sales), full value of the supply in box 7 (total value of purchases), a supply of legal services from a French business (, services relating to land and property (except opted supplies of land) (see, restaurant and catering services, admission to an event and work on goods (see, services that are treated as supplied in the UK as a result of the use and enjoyment provisions (see, specific part of the earth, on, above or below its surface, over which title or possession can be created, building or structure fixed to or in the ground above or below sea level which cannot be easily dismantled or moved, item making up part of a building or construction and without which it is incomplete (such as doors, windows, roofs, staircases and lifts), item, equipment or machine permanently installed in a building or construction which cannot be moved without destroying or altering the building or construction, construction or demolition of a building or permanent structure (such as pipelines for gas, water or sewage), valuing property, including for insurance or loan purposes, even if carried out remotely, providing accommodation in hotels, holiday camps, camping sites or timeshare accommodation, maintenance, renovation and repair of a building (including work such as cleaning and decorating) or permanent structure, property management services carried out on behalf of the owner (but not the management of a property investment portfolio), arranging the sale or lease of land or property, drawing up of plans for a building or part of a building designated for a particular site, services relating to the obtaining of planning consent for a specific site, on-site security services, even if provided remotely, agricultural work on land (including tillage, sowing, watering and fertilization), installation and assembly of machines which, when installed, will form a fixture of the property that cannot be easily dismantled or moved, the granting of rights to use all or part of a property (such as fishing or hunting rights and access to airport lounges), legal services such as conveyancing and drawing up of contracts of sale or leases, including title searches and other due diligence on a specific property, the supply of space for the use of advertising bill boards - for example the leasing of a plot of land or the side of a building to allow a billboard to be erected, the supply of plant and equipment together with an operator, where the supplier has responsibility for the execution of the work to the land or property, the supply of specific stand space at an exhibition or fair without any related services, drawing up of plans for a building or part of a building that do not relate to a particular site, arranging the supply of hotel accommodation or similar services, installation, assembly, repair or maintenance of machines or equipment which are not, and do not become, part of the building, management of a property investment portfolio, accountancy or tax advice, even when that relates to tax on rental income, the supply of storage of goods in property without a right to a specific area for the exclusive use of the customer, advertising services including those that involve the use of a billboard, marketing, photography and public relations, the supply of equipment with an operator, where it can be shown that the supplier has no responsibility for the performance of the work, general legal advice on contractual terms, legal services connected with fund raising for property acquisitions or in connection with the sale of shares in a company or units in a unit trust which owns land, stand space at an exhibition or conference when supplied as part of a package with related services that enable the exhibitor to promote their goods or services (for example design, security, power, telecommunications, and so on), ships, boats, yachts, hovercraft and barges, aircraft (including gliders, hot air balloons and helicopters), vehicles designed for the transport of sick or injured persons, agricultural tractors and other agricultural vehicles, mechanically or electronically propelled mobility scooters, a payment for the right to enter and visit a trade show, a short-term educational conference or seminar, the hire of a corporate box at a sport event (such as a cricket or rugby match), the supply of a stand with the right to exhibit at a trade show or exhibition, the supply of an educational course, with either ongoing attendance or significant course work, the supply of organising a conference or exhibition, including where an event is put on for a single customer, the supply by a singer to a promoter of appearing at a concert, a singer performing at a wedding or party, the entrance fee into a sporting competition, wedding or party planning that includes attendance at the event, alterations, calibrations, insulating, lacquering, painting, polishing, resetting (of jewellery), sharpening, varnishing, waterproofing, nominations to stallions, covering (that is, attempting to secure the pregnancy of mares), work which is not mainly physical work performed on the goods themselves, for example inspection for a purpose other than valuation, testing and analysis of goods - the physical work simply provides data for the required analysis, valuation of, or work carried out on, land or property, those services are included in the list in, transfers and assignments of copyright, patents, licences, trademarks and similar rights, acceptance of any obligation to refrain from pursuing or exercising a business activity, services of consultants, engineers, consultancy bureaux, lawyers, accountants, and other similar services - data processing and provision of information, other than any services relating to land, banking, financial and insurance services, the provision of access to, or transmission or distribution through, natural gas and electricity systems and heat or cooling networks and the provision of other directly linked services, letting on hire of goods other than means of transport, granting of a right for photographs to be published in a magazine article, including material which is digitally downloaded to the customer, individual shares in goods, for example an animal or yacht, even though certain rights may be included in the supply, a right to obtain reduced rates for admission to conferences and meetings as well as similar discounts on facilities available to members of clubs, associations or societies in return for a subscription, the right to occupy land or property including hotel accommodation (see, written translation services or interpreters’ services which do not take place at an event conference, design or consultancy services by engineers who generally, but not always, possess formal qualifications - the services must be of a type expected of an expert or professional, legal and accountancy services in the general administration or winding up of a deceased’s estate, even if that estate includes land or property; such supplies are not made to beneficiaries but to the estate - this is seen as whoever is appointed executor or administrator, although they may also be a beneficiary, architects’ services where there is no specific site of land, information supplied by a private enquiry agent, services of lawyers, surveyors and consultants where these directly relate to a specific piece of land or property, services carried out by an engineer which consist wholly or mainly of physical work on goods, including installation of goods, management, clerical or secretarial services, which includes the keeping of financial records, unless the essential nature of the service falls within the services provided by a consultant, lawyer, engineer as described, the letting on hire of goods (including means of transport), repairs to goods under an insurance claim (, radio and television broadcasting services, the UK but the services are effectively used and enjoyed outside the EU, outside the EU but the services are effectively used and enjoyed in the UK, are a business and purchase downloaded information over the internet for use at a specific site, a Canadian company hires out recording equipment to a UK private individual who uses the equipment in his UK home; the place of supply is the UK - this is because the goods are used and enjoyed in the UK and the place of supply would otherwise have been outside the UK or EU, an Australian tourist hires a video camera from a UK provider during a visit to the UK - the place of supply is the UK - this is because the goods are used and enjoyed in the UK and the place of supply would otherwise have been outside the UK and EU, a UK golf shop hires out a set of golf clubs to a UK customer for use on a holiday in the, an individual hires a yacht which is put at his disposal in the Channel Islands - the vessel is sailed to the UK where it spends 21 days of the 28 hire - as the means of transport is effectively used and enjoyed in the UK for 3 of the 4 weeks that it’s supplied, UK VAT is due on this percentage of the hire, a UK based airline hires a small passenger aircraft on a 6 month lease - the aircraft is used exclusively on a route flying between 2 cities in the, a UK business purchases downloaded information from another UK business for use both in its UK headquarters and its Canadian branch - although the supply is received in the UK, to the extent it’s used in Canada, it is outside the scope of UK VAT - UK VAT is due only to the extent of use by the UK headquarters, a UK business rents telecommunication capacity to connect it to an overseas third party call centre provider, this allows data to be transferred between the 2 in the furtherance of the UK business’s activities - the place of supply is the UK as this is where the recipient of the service is consuming the supply, a UK garage repairs a car as a result of a claim made by a UK insured person under a contract with a Gibraltarian insure - the work is performed in the UK and the car is registered for use in the UK - the service discharges the insurer’s obligation to the insured party for a vehicle to be used in the UK - the place of the supply of the repairs is the UK, simply an incidental part of an established telephone contract or account held by a customer who belonged outside the EU, HMRC was satisfied that these conditions were not being abused, your business is not established in an EU member state, the total value of the cross-border digital sales is less than £8,818 in the current year and previous calendar year, training performed for overseas governments, the export of any goods to a place outside the UK and EU member states, a supply of services which is itself zero-rated as work on goods for export from the UK or EU, any supply of services which is made outside the UK or member states, arranging an order for an overseas buyer to purchase UK goods that are exported from the EU - you must obtain valid evidence of export, arranging for a person in the UK to provide a repair service on goods that are imported into the UK and EU and then re-exported once the work has been carried out, arranging a consultancy service for a UK business, to be provided to a Canadian customer - this is because the place of supply of the consultancy service is outside the UK and EU and so you are making arrangement for a supply outside of the UK and EU, the making of arrangements for the supply of exempt insurance or finance - for more information on this see, the making of arrangements for a supply of freight transport - but, it may be eligible for zero rating under a different provision, see, services supplied by a person acting as a principal, even if their trading title or classification includes the word ‘agent’ or ‘agency’, acting as an intermediary in arranging a supply of services within the UK and EU, arranging for a supply of goods which are supplied within the EU, and those goods remain in the EU, the services must be used by the foreign or overseas government for the furtherance of its sovereign activities (that is not for business purposes), you must obtain and keep a written statement from the foreign or overseas government concerned, or its accredited representative, certifying that the trainees are employed in furtherance of its sovereign activities, similar bodies answerable to the government concerned, the goods on which the work is to be carried out must have been obtained, acquired within, or imported into the UK or EU for the purposes of being worked on, the goods must not be used in the UK between the time of leaving the supplier’s premises and exportation, on completion of the work, the goods are intended to be and, in fact are, exported from the UK or EU by either, the supplier of the service (or someone acting on their behalf), the customer (or someone acting on their behalf), if the customer belongs outside the UK or EU, alterations and repairs, calibrations, cleaning, insulating, lacquering, painting, polishing, resetting (jewellery), cutting (of precious stones), sharpening, varnishing and waterproofing, services relating directly to the ‘covering’ (that is, attempting to secure the pregnancy) of a mare, provided the mare is exported before the birth of the foal, gelding or breaking in of young horses (for example training yearling racehorses to the stage where they can be ridden safely in races) - but, actual racing is not accepted as training and if any horse is acquired or temporarily imported with the intention of racing it in the EU before re-export, zero rating will not apply, work which is not physical work carried out on the goods themselves (for example, mere inspection of goods or testing and analysis of goods is not ‘work on goods’), repair or other work which becomes necessary in the UK and EU after acquisition or importation of goods, such as incidental running repairs, while the goods are being used (even though they may be subsequently exported). Examples of work on goods which may qualify for zero rating under this section include: Examples of services which do not qualify for zero rating under this section include: To zero rate a supply of such services you must obtain and keep satisfactory official or commercial evidence of the export of the goods to a place outside the UK or EU. x Part 4 provides further details on the time of supply changes. This checklist does not address issues arising from contracts with consumers. On top of the pandemic, another major challenge is a layer of fine print found in the new United States-Mexico-Canada Agreement (USMCA) that will directly affect North American auto manufacturers and their shippers—and perhaps other industries as well. B2B intermediary services fall under the B2B general rule and are supplied where the customer belongs. Where this applies, your services are supplied where your customer belongs and so are outside the scope of VAT. This covers a wide range of services of different natures. Additional rules apply to B2C letting on hire of goods and radio and television broadcasting services (see section 13). Background to place of supply of services, 4. X Ltd in India receives order from PQR ltd USA for component supply. In this section, your customer is the person to whom you supply your intermediary services. If you’re supplying installed goods you’ll need to consider the accounting procedures in section 11 of VAT Notice 725: the single market. This is the place where the customer takes actual physical control of the means of transport (for example, where the vehicle is located when the keys are handed over). It’s therefore important to consider the place of supply of the goods or services being arranged. Where this is the UK, the services are subject to UK VAT. An intermediary arranges supplies between 2 other parties - a supplier and that supplier’s customer. If in doubt, confirmation should be sought from the customer. If you supply services whose place of supply is in the UK, you may be liable to register for VAT in the UK. The partial exemption implications for reverse charge services are explained in Notice 706: partial exemption. x In Part 3 there is more detail on how the new place of supply rules will operate.