Can I sell services to the EU? (2023)

Can I sell services to the EU?

If you have a registered business providing services (as an architect or tourist guide, for example) in the country where you live, you can offer those services in another EU country without setting up a company or branch there.

If you sell services to businesses based in another EU country you don't usually need to charge your customers VAT. Your customers will pay VAT on the services received at the applicable rate in their country (using the reverse charge procedure).

Once the Brexit transition period is over, if you sell digital services to EU customers, you'll no longer be able to use the UK's VAT Mini One Stop Shop (MOSS) service to declare sales and pay VAT due in EU member states.

Items being sold into the EU from England, Scotland and Wales are subject to new VAT rules and can be sold through EU Import One Stop Shop (IOSS): Any item, regardless of value, sold to the EU is subject to the local rate of VAT and charges in the destination country.

For EU-based companies, VAT is chargeable on most sales and purchases of goods within the EU. In such cases, VAT is charged and due in the EU country where the goods are consumed by the final consumer. Likewise, VAT is charged on services at the time they are carried out in each EU country.

You can still zero rate the sale if: the goods are delivered to the EU business, not sold to them. the EU business does not use the goods, it only processes them for export.

Which country's VAT rules to use when charging VAT on services. If you're in the UK and the place of supply of your service is in the UK, you charge and account for VAT according to UK VAT rules. If you're in the UK and the place of supply of your service is in an EU country, you do not pay UK VAT.

UK businesses will no longer get the benefit of the current EU-wide VAT threshold for supplies of digital services to consumers (£8,818). This means that EU VAT will be due on all supplies of digital services to EU consumers, regardless of the value of the sales.

Does the UK still have to comply with EU law?

All EU law, across all policy areas, will still be applicable to and in the United Kingdom, with the exception of provisions of the Treaties and acts, which were not binding upon and in the United Kingdom before the entry into force of the Withdrawal Agreement. The same is true for acts amending such acts.

From 1 January 2021, the main changes are that; UK retailers that want to import the goods into the member state of the customer and sell them to customers will have to register in the EU member state of the consumer, pay import VAT and charge local VAT.

If you have a UK business, you might face restrictions on your ability to own, manage or direct a company registered in the EU , Switzerland, Norway, Iceland and Liechtenstein. You should be prepared for: additional requirements on the nationality or residency of senior managers or directors.

Self-defence sprays like pepper spray. Counterfeit goods of any description. Some types of nut – such brazil nuts still in their shell. Mercury thermometers and other goods that contain potentially dangerous chemicals.

So, accountants would not charge VAT to any overseas client from 1 January 2021. B2B services remain basic rule while B2C services are covered by Para 16. There would be no EU registration obligation for B2B services as these are covered by the mandatory reverse charge.

Not necessarily. Value added tax (VAT) will be chargeable if: the firm is registered for VAT purposes, and. the supply of the particular legal services to the client is subject to VAT and not exempt from VAT or zero-rated.

Charges levied by the government, such as MOT testing, and tolls on bridges that are owned by the state, are outside the scope of VAT. Wages paid to employees are also outside the scope of VAT. You can find out more about which goods and services are outside the scope of VAT in our guide to VAT rates.

VAT exemption for goods and services

Sporting activities and physical education. Education and training. Some medical treatments. Financial services, insurance and investments.

You have two options: international marketplaces or your own website. International marketplaces include Alibaba, Etsy and eBay—marketplaces where customers expect to buy from sellers in faraway countries.

What is the best way to market a service?

If you sell goods from the UK to the EU

You only need to be registered for VAT with HM Revenue and Customs ( HMRC ). You can charge VAT at zero rate for these sales.

If you're a non-EU business, you'll need to apply for a VAT number in order to do business in any of the 27 member states.

VAT exemptions for small enterprises

In most EU countries you can apply for a special scheme that enables you to trade under certain conditions without the need to charge VAT. If your company makes taxable supplies of goods or services below a certain annual limit, it may be exempt from VAT.

Claiming a refund on or after 1 January 2021

If you're charged VAT in an EU member state, you'll normally be able to reclaim this from the tax authority in that country. You'll need to make your claim using either: the EU VAT refund system. the 13th Directive process.

If your business buys services from outside the UK a rule called the 'reverse charge' applies. Convert the value of the services into sterling. Calculate the amount of VAT due and include this in your VAT Return.

What is the VAT Reverse Charge? When you buy goods or services from suppliers in other EU countries, the Reverse Charge moves the responsibility for the recording of a VAT transaction from the seller to the buyer for that good or service.

Other ways to prevent your company from paying VAT are to avoid getting your customers to purchase materials themselves, not taking large one-off payments, and operating on fewer days a week.

One of the best ways of making relevant, high quality contacts in Europe is to attend various, specialised trade events such as trade fairs and conferences. See the tip: Attending trade events, fairs and conferences for more information about this. Work with your contacts. They are not just a record in your database.

How do you sell to foreign customers?

You cannot take the following with you into the EU : meat or products containing meat. milk or dairy products.

Accepted general principles of European Union Law include fundamental rights, proportionality, legal certainty, equality before the law and subsidiarity.

Some countries provide that if national and EU law contradict, courts and public officials are required to suspend the application of the national law, bring the question to the national constitutional court and wait until its decision is made.

The Value Added Tax, or VAT, is a tax on consumer spending, which is paid by the consumer at the time of purchase of a product or service. This is implemented on all goods and services sold within the European Union. The rates vary across the different member states and for digital goods range from 17% to 27%.

If you are considering taking advantage of remote work by working for a UK company from another country, there are several potential consequences for both you and your employer. Therefore, working overseas can trigger all sorts of tax complications, social security obstacles and other legal issues.

Working in the EU

As a UK tax resident, you'll be classed as a 'third-tier' country national, and in most cases will be required to obtain a permit to work. Unfortunately, as your limited company is not a local entity abroad, it will not be able to sponsor a work permit for you.

You must register if you set up a place of business in the UK or if you usually carry out business from somewhere in the UK. Some types of company cannot register as an overseas company in the UK, including partnerships and unincorporated bodies. Contact the Department for International Trade if you need advice.

Since 1st January 2021, shipments to EU member states are treated the same way as international shipments and therefore have to clear customs. This means that a commercial invoice and other export documentation are required for every shipment.

What are the duty free limits from the EU?

1 kg of tobacco. 10 litres of spirits. 20 litres of fortified wine. 90 litres of wine (including a maximum of 60 litres of sparkling wines)

Sending items to the EU – VAT & customs duties

Since 1 July 2021, most goods to the EU (including gifts) are now subject to VAT and potentially a clearance fee. The taxes and duties applied depend on the individual contents of the parcel, the weight and the value.

While exported services are VAT exempt, imported services are not exempt from VAT. Under the prevailing VAT Act, services can be classified as services supplied within Nigeria, imported services and exported services.

You will not be able to charge VAT on taxable supplies and products until you have your number. The VAT due from your customers is known as output tax, and you will need to review HMRC's VAT rates guidelines to determine which rate of VAT to charge to your customers.

The EU and UK Trade and Cooperation Agreement establishes zero tariffs or quotas on trade between the UK and the EU, where goods meet the relevant rules of origin.

VAT is a tax on goods used in the UK and you do not charge VAT if goods are exported from: Great Britain to a destination outside the UK.

As of 1 January 2021, when it comes to exporting goods to EU countries, the VAT situation also changes. Exports to EU countries are treated like those to non-EU countries, which is to say, they should be zero-rated for UK VAT.

The European Company – also known as SE (Societas Europea in Latin) – is a type of public limited-liability company that allows you to run your business in different European countries using a single set of rules.

If your place of supply is in a country other than the EU then you do not need to charge VAT as it is outside the scope of VAT entirely. No further actions are needed for this other than not including VAT on your invoices.

Do you pay VAT on services?

Not necessarily. Value added tax (VAT) will be chargeable if: the firm is registered for VAT purposes, and. the supply of the particular legal services to the client is subject to VAT and not exempt from VAT or zero-rated.

Value Added Tax (or VAT) is an indirect tax imposed on all goods and services that are bought and sold by businesses, with a few exceptions.

The EU-UK Free Trade Agreement in detail

It provides for zero tariffs and zero quotas on all goods that comply with the appropriate rules of origin.