Key facts
- Goods: Place of supply is generally where the goods are when supplied.
- Services (B2B): Place of supply is where the customer is based.
- Services (B2C): Place of supply is where the supplier is based (with exceptions).
- Getting the place of supply wrong means charging VAT in the wrong country.
Why Place of Supply Matters
The place of supply determines which country’s VAT rules apply. If the place of supply is the UK, you charge UK VAT. If it’s another country, their VAT rules apply.[1]
Place of Supply: Goods
For goods, the basic rules are:[2]
| Scenario | Place of Supply |
|---|---|
| Goods sold and collected in the UK | UK |
| Goods installed or assembled | Where installation takes place |
| Goods exported from the UK | UK (but zero-rated) |
| Goods imported into the UK | UK (import VAT applies) |
Place of Supply: Services (B2B)
For business-to-business services, the general rule is that the place of supply is where the customer is established.[1]
This means if you supply services to an overseas business, the place of supply is in their country — you don’t charge UK VAT.
Place of Supply: Services (B2C)
For business-to-consumer services, the general rule is that the place of supply is where the supplier is established. So UK-based suppliers charge UK VAT to non-business customers worldwide (with some exceptions).
Key Exceptions
- Land-related services — place of supply is where the land is
- Entertainment, cultural, sporting events — where the event takes place
- Transport — where the transport takes place
- Digital services to EU consumers — where the consumer is (use OSS)
Frequently Asked Questions
What is the place of supply for VAT?
The place of supply determines which country’s VAT rules apply to a transaction. If the place of supply is the UK, you charge UK VAT; if it is another country, their rules apply.
Do I charge UK VAT on services to overseas businesses?
For B2B services, the general rule is that the place of supply is where the customer is based. So you would not normally charge UK VAT on services supplied to an overseas business.
What are the place of supply rules for goods?
For goods, the place of supply is generally where the goods are located when supplied. Goods exported from the UK are zero-rated, while goods imported into the UK attract import VAT.
Do I charge UK VAT on digital services to EU consumers?
No. Digital services sold to EU consumers have their place of supply where the consumer is located. You must account for VAT in the consumer’s EU country, typically via the One Stop Shop (OSS) scheme.
Further Reading
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Sources
- Place of supply of services — GOV.UK
- Place of supply of goods — GOV.UK
- VAT guide (VAT Notice 700) — GOV.UK