VAT on movements of goods between Northern Ireland and the EU

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How to charge and account for VAT on the movement of goods between Northern Ireland and EU member states (VAT Notice 725).

Overview

1.1 Information in this notice

This notice explains the way VAT is charged and accounted for on movements of goods between Northern Ireland and the EU and how businesses trading under the Northern Ireland Protocol should account for VAT on goods they buy from or sell to EU member states.

1.2 Changes to this notice

This notice has been updated to reflect changes to the VAT treatment of supplies of goods and services following the UK’s departure from the European Union and the end of the transition period.

1.3 Who should read this notice

You should read this notice if you’re involved in the movement of goods between Northern Ireland and EU member states.

1.4 Legal status of this notice

Under, The Northern Ireland Protocol Northern Ireland aligns with EU VAT rules for the movements of goods. The Principal VAT Directive (2006/112) is the primary EU VAT law.

The UK law implementing this in Northern Ireland can be found in:

• Value Added Tax Act 1994, Schedule 9ZA
• VAT Regulations (Statutory Instrument 1995/2518)
• Regulations allow HMRC to specify the form and reporting requirements for EC Sales List. Some or all of paragraphs 17.10 and 17.11 contain the specifications and requirements.
• Regulations permit HMRC to make conditions that have force of law.

Some or all of paragraphs 4.3, 4.4, 4.5, 5.4 and 15.2.8 have force of law.

1.5 Imports and exports

The term ‘import’ is only used for goods coming into Northern Ireland from countries outside the EU.

The term ‘export’ is only used for goods leaving Northern Ireland to go to countries outside the EU.

2. VAT in the EU

2.1 Definition of the EU territory

The VAT territory of the EU is made up of 27 member states.

2.2 Other areas not within the EU

Liechtenstein, the Vatican City, Andorra and San Marino are not within the EU for VAT purposes.

2.3 Status of the territories

You need to know which territories are included, or excluded from an EU member state because movement of goods between Northern Ireland and any of the:

• countries, or their included territories, are treated as EU supplies for VAT purposes
• excluded territories are treated as imported or exported goods for VAT purposes

2.4 VAT collected on goods moving between Northern Ireland and EU member states

VAT on goods traded with the EU is not collected at the frontier. The way VAT is accounted for on these supplies largely depends on whether the recipient of the supply is registered for VAT in the country of arrival.

For these purposes movements of goods between Northern Ireland and EU member states within the same legal entity (often referred to as a transfers of own goods) are treated as supplies. Special rules apply in the case of natural gas and electricity, along with heat and cooling. Place of supply of natural gas and electricity (also heat and cooling).

2.5 VAT collected on supplies of excise goods

For information about the VAT treatment of supplies involving excise goods, see paragraph 15.4.

2.6 Trade statistics on goods moving between Northern Ireland and EU member states

The system for collecting statistics on the trade in goods within the EU is known as Intrastat. All Northern Ireland businesses carrying out trade with EU member states must declare the totals of their sales and acquisitions on their VAT Return. Businesses whose EU trade exceeds a legally set threshold have to complete additional statistical information called Supplementary Declarations. Statistics are compiled from the Supplementary Declarations and information supplied on the VAT Return.

2.7 Northern Ireland and EU member states VAT and Intrastat rules

The general rules are the same, but there may be some small variations. If you want to check the position in Northern Ireland or an EU member state you should contact the relevant VAT authority (see paragraph 2.8).

2.8 VAT in Northern Ireland and EU member states

Details of contact addresses and other useful information provided by the VAT authorities in EU member states can be found on the European Commission website.

2.9 Equivalent of ‘Value Added Tax’ and ‘VAT’ in EU member states

The equivalent in each EU member state is: Read more here