This is a general guide. Please check the latest requirements with the Tax office.
Sales between EU Countries
Sales to an EU country from a different EU country are normally dependant on if the customer is a business with a valid VAT number, or the value of sales to that country in a year.
If you sell goods to another business in a different EU country who has a valid VAT Number, you normally do not charge VAT.
If the customer is not a business or does not have a valid VAT Number then, if it is over the limit set by that country (€35,000 to 100,000) you may need to register there and charge VAT at the rate applicable in that country. If your sales are under the Limit you would normally charge VAT at the rate for your country.
If the VAT is charged on the sale you may not have to report these sales on an ESL. However, you'll have to complete an Intrastat Supplementary Declaration if your sales to other EU customers exceed £250,000 of goods in a year.
(Normally proof of despatch to that location is required if Tax is not charged).
Other Export Sales
On sales to country outside the EU you normally would not charge VAT
Processing Sales
To set up the Contact records for EU / Export customers:
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Set the Area Code (in the Other tab) to E for EU customers (if business based in UK), or Export customers for all export customers in NZ / Australia
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Set the Area Code (in the Other tab) to X for NON EU customers (if business based in UK)
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Set the Tax Rate Over-ride (in the Sales tab) to Zero rated where VAT is not to be charged
The Tax Rate Over-ride will ensure that when you Invoice the Tax is automatically zeroed.
The Area Code setting will ensure the Export / EU sales are listed correctly when you produce the Tax (VAT) Return
Processing Purchases
If the Purchase Invoice has VAT detailed on it, and the supplier has specified a valid Tax / VAT Number you can normally just enter the purchase with the Tax amount which will claim the VAT back on the BAS / VAT return.
If you buy goods for the purposes of your business from a supplier based outside the EU, you would generally pay VAT at the point of import .
To set up the Contact records for these suppliers:
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Set the Area Code (in the Other tab) to E