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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

From HM Revenue & Customs · VAT Export and Removal of Goods from the UK

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.