Goods movement
This article explains different types of goods movements within and outside the European Union and their VAT implications.
📍 Intra-EU Acquisition (IEA) of Goods
An Intra-EU Acquisition (IEA) occurs when a business in one EU Member State purchases goods from a business in another Member State.
Key rules:
- The purchaser must self-account for VAT under the reverse charge mechanism.
- The supplier treats the sale as an Intra-EU Supply (IES) and does not charge VAT.
- VAT is accounted for in the purchaser’s VAT return at the applicable rate of their country.
- If eligible, the purchaser can reclaim the VAT in the same VAT return.
- The purchaser must account for VAT on any further sale of the goods.
Example: A German company buys goods from a Spanish company. The Spanish seller confirms the buyer’s VIES registration and sells the goods VAT-free. The German buyer applies the reverse charge to self-account for VAT.
📍 Intra-EU Supply (IES) of Goods
An Intra-EU Supply (IES) occurs when a business in one EU country sells goods to a business in another EU country.
Key rules:
- The customer must be VAT-registered in another Member State.
- The supplier must obtain and verify the customer’s VAT number (including country prefix).
- The supplier must state both VAT numbers (buyer & seller) on the invoice.
- The goods must be transported to another EU country.
- If all conditions are met, the sale is VAT-exempt.
âť— If VAT exemption conditions are not met:
- The supplier must charge their domestic VAT.
- If the conditions are later proven, the buyer can reclaim the VAT and the supplier can adjust their VAT return.
Example: A French company sells goods to an Italian company and ships them from France to Italy. After verifying the Italian buyer’s VIES registration, the seller does not charge VAT.
📍 Determining the Place of Taxation
Scenario | VAT Treatment |
Goods are NOT transported | VAT is applied in the country where the sale takes place. |
Goods are transported by the supplier | VAT is applied in the country where the transport begins. |
Example 1: A Spanish manufacturer sells a machine inside Spain to a German buyer. Spanish VAT applies.
Example 2: A German supplier transports goods from Hamburg to Berlin. German VAT applies as the transport starts in Germany.
📍 Importation of Goods into the EU from Non-EU Countries
When goods enter the EU from a non-EU country, VAT is determined by the entry point into the EU.
VAT rules for imports:
- VAT is due in the country where the goods enter the EU.
- If the goods enter via a customs procedure, VAT is due where they exit the procedure.
Example 1: Dutch VAT applies to oil from Russia arriving in Rotterdam.
Example 2: Goods enter Poland under a transit procedure but are cleared in the Netherlands—VAT is due in the Netherlands.
📍 Exporting Goods from the EU to Non-EU Countries
Exports refer to shipping goods outside the European Union.
Key points:
- Most exports are VAT-exempt.
- Some goods (e.g., agricultural products, cultural objects) require special permits.
- Before exporting, you must submit an export declaration to customs.
VAT exemption applies if:
- The goods are transported outside the EU VAT area by the supplier.
- The goods are transported outside the EU VAT area by a non-EU buyer.
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verified - 13.02.2025 - EA
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