VAT – Place of Supply of Services

June 8, 2017

With different rates of value-added tax (VAT) applying throughout Europe, the place that a supply is made (and hence the VAT rate which is applicable) can be a very important matter.

The basic ‘place of supply’ rule is that in normal circumstances (and subject to some exceptions), the place of supply for a service is the place where the supplier ‘belongs’ – in other words, where they normally do business. However, this has caused considerable problems where the supply is one of services, not goods. Accordingly, the rules were changed on 1 January 2010, such that the basic rule for the place of supply of a service is now where the customer belongs if the customer is a business.

The place of supply rules are complex and should be understood fully if they affect you.

The rules relating to the place of supply of electronic products to non-business customers changed on 1 January 2015. See the HMRC website for details.

How to work out your place of supply.

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