VEXP80335 - Examples of various export scenarios and VAT treatments: Examples involving exports to associated companies outside the UK: supply to non-EU company with a UK office

In this example

  • a non-EU customer has a UK office
  • the non-EU customer is VAT registered to recover input tax but makes no supplies within the scope of UK VAT
  • a UK supplier sells goods for export to the non-EU company
  • the goods are sent out of the EU to the non-EU company (either by the UK supplier or by a freight forwarder employed by the non-EU customer)

If the UK supplier arranges for the physical export of the goods, this is a direct export. The supply may be zero rated under section 30(6) VAT Act 1994, provided the conditions in Notice 703 are met.

If the non-EU company arranges for the goods to be exported this is an indirect export. The supply can be zero rated because although the non-EU company has a UK VAT registration number and an office, and is therefore a taxable person in the UK

  • It has no business establishment in the UK from which it makes taxable supplies
  • the conditions set out in regulation 129 of VAT Regulations 1995 are, therefore, met.