VAT on intra-community transportation services

[adomast]

Germany based transportation company (Germany VAT registered ) intends to supply intra-community freight transport services (UK->DE) to customer - individual person – German resident - who is not registered as a VAT payer at any EU country). Germany based Transportation Company has no permanent establishment nor it performs any trade in the UK.

Supply of these services would be a subject to the UK VAT, because as described at sixth Council Directive (1977/388) the place where intra-community freight transportation commences is considered the place of supply of the services. This is confirmed by HMRC Notice 741 (Place of supply of services).

Does the Germany based transportation company has to register for VAT in the UK, if it does not reach turnover limit, with earlier mentioned freight transport services supplies, of 61 000 ₤?

The problem is that HMRC assured us „If our supplies made in the UK do not reach the taxable threshold of £61,000 then we will not be liable to register for UK VAT.“

But according to the Article 24(2) of Directive 77/388/EEC, this scheme is reserved for taxable persons established within the territory of the country. And as itÂ’s laid above - Germany based Transportation Company has no permanent establishment nor it performs any trade in the UK.

Adam Tamm
453fab@gmail.com

[Generix]

I don't understand, what scheme are you refering to. It appears you don't need to register in the UK to me, and you incur no problems?

[adomast]

By "scheme" i mean according to Directive 77/388/EEC VAT registration treshold in any Member State can be applied to local business only.