VATPOSG3530 - Main rules: distance selling: distance sales from Northern Ireland

UK Law {#}

Schedule 9ZB, paragraph 29

29(2) Goods whose place of supply is not determined under subparagraph (1) or subsection (2) or (3) of section 7 and which do not consist in a new means of transport are treated as supplied outside the United Kingdom where—

(a) the supply involves the removal of the goods from Northern Ireland, by or under the directions of the person who supplies them, to a member State,

(b) the person who makes the supply is taxable in a member State, and

(c) provisions of the law of that member State corresponding, in relation to that member State, to the provisions made by sub-paragraph (1) make that person liable to VAT on the supply.

(3) But sub-paragraph (2) does not apply in relation to any supply in a case where the liability mentioned in sub-paragraph (2)(c) depends on the exercise by any person of an option in the United Kingdom corresponding to such an option as is mentioned in paragraph 48(2) unless that person has given, and has not withdrawn, a notification to the Commissioners that the person wishes supplies by that person to be treated as taking place outside the United Kingdom where they are supplies in relation to which the other requirements of sub- paragraph (2) are satisfied.

Commentary {#}

Paragraph 29(2) applies where a UK supplier is making distance sales (see VATPOSG3510) of goods from Northern Ireland to customers in an EU member State. Without it the place of supply is the UK as it is the country of departure of the goods (see VATPOSG3810). But in cases where such a UK supplier

• has distance sales below the threshold but has nevertheless opted by giving written notice to HMRC to register for VAT there, or
• the goods are subject to excise duty in the member State of arrival

then the place of supply becomes the member State of delivery and the supplier is liable to register for VAT in that member State.

The tests in paragraph 29(2) apply to each member State individually, so a liability (or option) to account for distance sales in one member State does not automatically mean they are liable or have opted in any other member State.

The new EU distance selling threshold introduced as of 1 July 2021 is 10,000 euros (£8,818) per calender year for total sales to the EU.

You should note that paragraph 29(2) in providing for the supply to be ‘treated as supplied outside the United Kingdom’ does not actually prescribe the alternative place of supply. For this the UK supplier must look to the relevant legislation in the member State concerned. That same domestic legislation will also determine the UK supplier’s liability to register in the member State of delivery.