Chapter 22 - International Aspects - Services

Question 1

Place of Supply

Answer 1

Place of supply is the place where the supply is liable to VAT.

Question 2

EU Member State

Answer 2

Where the place of supply is an EU member state, the supply is liable to VAT (if applicable) in that country and no other country. Therefore, if the PoS is not the UK, the supply is outside the scope of UK VAT

Question 3

Outside the EU

Answer 3

Where PoS is outside the EU, the supply is not liable to VAT in any EU state. In this case:

• if a UK business supplies services and the place of supply is in the UK, any VAT due must be account for to HMRC no matter where the customer belongs
• If a UK business supplies services and the PoS is in another EU member state, either the UK supplier or customer is liable for any VAT due in that country

Question 4

Current Rates - General Place of Supply

Answer 4

Two rules under S.7A VATA 1994 for determining the place of supply for services:

• business-to-business
• business-to-consumer

Question 5

Business-to-Business (B2B)

Answer 5

Where one business supplies services to another, the PoS is where the customer/buyer belongs

Question 6

Business-to-Consumer (B2C)

Answer 6

Where one business supplies services to a consumer, the PoS is where the supplier/seller belongs

Question 7

Exceptions to the General Place of Supply Rules

Answer 7

There are overrides to the normal rules that are in S.4A of VATA 1994

Question 8

Services Related to Land

Answer 8

Includes grantss and assignments of leases, estates agents, auctioneers, architects and surveyors services) - place of supply is the country where the land is

Question 9

Passenger Transport Including Their Luggage

Answer 9

Place of supply is where the transportation takes place. If several countries are covered, the liability is split between them based on distance covered in each

Question 10

Admission to Cultural Events and Entertainment Events

Answer 10

Place of supply is where the event is

Question 11

Other Services Supplied to Non-EU Recipients

Answer 11

Applies to B2C only. Includes transfers of copyrights, patents and trademarks, advertising services and services of consultants, engineers, lawyers and accountants. PoS is where the customer belongs

Question 12

Reverse Charge

Answer 12

A reverse charge is where the customer has to account for the VAT on their VAT return in the output tax box to recover it as input tax