Search Results

Comprehensive guide on the VAT liability of private hire / taxi services provided to the general public including a look at the principal and agent operating models. Introduction The provision of taxi services to the public is chargeable at the standard rate of VAT 20%. Taxi services comprise of: Drivers who own or rent vehicles to provide taxi services to the public Companies that provide taxi services to the public by either using their own fleet of vericles or use drivers who operate on a sub contract basis. Drivers who own or rent vehicles to provide taxi services Drivers that use their own or rented vehicles to provide taxi services to the general public are doing so as self employed taxi drivers. Drivers must register for VAT where they they exceed or intend to exceed the VAT registration threshold of £85,000 Standard Rated VAT 20% VAT is applicable on these taxi services as follows: Taxi journeys provided to the public (including waiting time) Any additional charges for baggage Services provided to other taxi firms on a contract basis Note: Working for a taxi firm on an employed basis (as an employee) is not classed as being in business providing taxi services. The company employing the taxi driver(s) is providing taxi services for VAT purposes. Companies that provide taxi or private hire services Companies that provide taxi or private hire services to the general public using either employed or subcontracted drivers are providing vatable services and should charge 20% VAT. These services are either provided to customers who pay cash directly to the driver or to account holders who use private hire firms such as Addison Lee or UBER. Services that they provide where standard rated VAT 20% is applicable are as follows: Taxi or private hire journeys provided by the company to the general public (individuals or companies etc) by drivers employed by the company Taxi or private hire journeys provided to the general public (individuals or companies etc) using subcontracted drivers or companies Taxi Journeys provided by the Owner, Director, Partner to the general public (individuals or companies) using the companies vehicles or their own. Referral fees received from taxi drivers or firms for passing business to them Note: VAT should be applied to the full fare collected from the customer before any deductions made from amounts payable to subcontracted drivers or companies. (For example where you charge them for use of equipment such as radios, satnavs etc.) Also VAT invoices or receipts should be provided to customers who request or require one. UBER vs HMRC - Note Uber was assessed for almost £400M by HMRC in 2023 for VAT in relation to VAT which HMRC argues is underpaid for historical fare rides where VAT was not charged by UBER. UBER are challenging this assessment. See link to Tax Policy Associates Article. Exclusive report: HMRC pursuing Uber for another £386m of VAT – Tax Policy Associates Ltd . Also see BOLT case below in Dec 2023 which may help UBER's case when heard in 2024. BOLT vs HMRC - Note BOLT recently won a tax tribunal case in London where it argued that it should only pay VAT to HMRC on the margin (difference between what it receives and pays to drivers) based on the Tour Operators Margin Scheme. HMRC have since been granted the right to appeal the decision. March 2025 - UTT (upper tribunal) Bolt has successfully defended its case against HMRC and the UT has agreed with the FTT in that Bolt can use the TOMS for VAT on ride hailing services. May 2025 - HMRC - have paused collecting assessed VAT on the full Value of rides on its platform following the success of the bolt case above. Veezu and Delta Taxis - The Court of Appeal overturned the High Court’s earlier decision brought by UBER where it argued that VAT should be applicable to Taxi fares. This now means taxi firms in England and Wales – outside of London – will not be forced to apply VAT onto their fares. The ruling will not impact Uber, who will continue to charge VAT on fares, but will mean many smaller firms can continue to operate as they have previously. (Source City AM) UBER - July 2025 - Has lost its Supreme Court appeal on the above where it sought to overturn the above High Court decision that rival taxi firms outside of London do not have to charge 20% VAT on their rides. Business Structure of Companies that provide Taxi or Private Hire Services Principal or Agency Model where taxi or private hire firms use subcontracted drivers, they can either act in the capacity of Principal or as an agent to the drivers. Acting as Principal Where taxi or private hire firms provide services to the general public as principal using subcontracted drivers, the services are being provided by the firm itself and it must account to HMRC for VAT at 20% on the full fare charged to the customer. Acting as Agent Where taxi or private hire firms provide services to the general public acting as agent for self employed drivers or other companies, it means the actual supply of transport services is between the self employed driver and the customer riding the taxi. The Taxi firm acting as agent will normally: Inform the drivers of customer bookings and location Collect cash on behalf of the drivers where bookings are made by account holders. Invoice the drivers for their agency fee and charges for car and radio hire plus 20% VAT Invoice account holder customers (including 20% VAT) for an admin charge which should be shown as a separate line on the total invoice for transportation services provided Note: VAT should only be billed and collected from account holders where the driver is registered for VAT Using the Principal Model and the Agency Model A company can use both the principal model and agency model for account holders and cash customers respectively provided there are properly drafted contractual agreements and terms with drivers and companies and there are genuine differences between the two sides of the business. Taxi Associations Taxi Associations are companies that are set up by a group(s) of taxi drivers to: Facilitate the allocation of customer orders among its members provide a central control room for handling and allocating jobs provide standard equipment such as radios, satnavs etc to members Taxi Associations must register for VAT where their services billed exceed the VAT Registration threshold of £85,000 -Contains public sector information licensed under the Open Government Licence v3.0. Taxi Services and VAT

VAT on Catering - Comprehensive guide on how VAT is applied to food and catering, including whether the standard rate or zero rate of VAT applies to hot vs cold Food. Introduction Most food products are zero rated but food supplied in the course of catering is normally Standard Rated. Catering - Standard Rated Food and drink served in a Restaurant Supplies of food and drink at events such as conferences, parties, weddings and similar gatherings Cooked and ready to eat meals delivered Supply of cooking at a customers home for parties, post wedding meals etc Supply of catering under a catering contract Packed Lunches supplied for trips or other events Meals that form part of a package for hotel or bed and breakfast accommodation Service charges added to bills in restaurants Supplies of food, confectionery, drinks from vending machines in a restaurant Supplies of food and drink on a train, coach, plane, ship for journeys within the UK Supplies of food and drink to staff and visitors at clinics, hospitals and other care facilities Hot takeaway food that has been heated to enable consumption such as fish and chips, Chinese takeaways, Indian takeaways, kebabs, Pizzas, pies, rolls, sausage rolls, pasties, hamburgers, hot dogs, baked potatoes with hot or cold filling, soup, tea, coffee, hot chocolate and other hot drinks. Hot takeaway food that's been heated to order such as toasted bread, sandwiches, panini, teacakes Hot takeaway food kept hot after cooking such as freshly baked croissants, pretzels, patties, pasties, hamburgers, Kebabs, hot dogs etc Catering - Zero Rated Supply of food that customers have to prepare for themselves Sandwiches and other food and drink (that is normally zero rated) taken to buildings for sale where the seller has no contract of supply with the firms. Food and drink provided on trains, planes and ships where the destination is outside the UK Cold takeaway (consumed off premises) food (not crisp, confectionery etc that is ordinarily standard rated Catering - Exempt Supply of food and drinks by an educational institution in the canteen to it students Supply of food and drinks in a school tuck shop Supply of food and drinks by a hospital, clinic, care home to its patients Catering - Outside the Scope of VAT Tips in restaurants Who Must Account to HMRC For Output VAT Charged The Owner of the catering facilities must account for VAT on sales of food and drink in its restaurants and on supplies of hot food The catering contractor operating on the owners premises as principal should account for VAT on any food and drink sold in the catering facility and also any fee invoices issued to the owner of the facility and on any subsidies provided. The owner of a catering facility where they have an agent that operates the canteen or restaurant on their behalf should account for VAT on food and drinks and any hot takeaway food sold within its facility. Under this arrangement a supplier can either invoice the principal directly for goods supplied to the agent for sale in the canteen allowing them to recover the VAT or issue the invoice to the agent who can then recharge these on to the principal with VAT and account for it on their return. Contractors who sell goods to both the catering establishment owner and also supply goods in the restaurant. In this case standard rated VAT will be payable by the agent on food and drink sold to the owner and on the fees charged by the agent for running the canteen. -Contains public sector information licensed under the Open Government Licence v3.0. Food and Catering - VAT Guide for Hot and Cold Food

Comprehnsive guide for the different VAT rates applicable to various goods and services in the UK, including Health, Transport, Land & Buildings, Education, Charities etc. VAT Rates For Goods & Services Food and Drink Food and drink for human consumption is usually zero-rated but some items are always standard-rated. These include: catering alcoholic drinks confectionery crisps and savoury snacks hot food sports drinks hot takeaways ice cream soft drinks and mineral water Restaurants must always charge VAT on everything eaten either on their premises or in communal areas designated for their customers to use, such as shared tables in a shopping centre or airport food courts. In addition, restaurants and takeaway vendors must charge VAT on all hot takeaways and home deliveries, but do not need to charge VAT on cold takeaway food unless it’s to be eaten in a designated area. Animals and animal food Supplies of live animals that are zero-rated You can zero rate the sale, hire or loan or supply of a part interest (a share) of a live animal provided it’s of a kind generally used in the UK, or yielding or producing food for human consumption. Animal includes bird, fish, crustacean and mollusc. Examples of Zero Rated Animals are: meat animals dairy animals poultry (except ornamental breeds), including those for egg production, honey bees fish (except ornamental breeds and coarse fish), including those for production of edible roes Animals that are standard-rated Examples of standard-rated animals are: bumble bees ornamental birds and fish racing pigeons horses Live kangaroos Pets Animals that will be kept as pets can be zero-rated only if they are of a kind that is normally used for human food production. For example, rabbits, other than ornamental breeds, are always zero-rated. Animals kept for non-food purposes Animals kept for non-food purposes can be zero-rated if they are of a kind normally producing food for human consumption. Sheep kept mainly for their wool, or bulls used for breeding are zero-rated. Birds Most breeds of chicken are zero-rated, as are game birds and ostriches. Ornamental breeds of birds are standard-rated. The following breeds of ducks, geese and turkeys are zero-rated: Type of fowl Breed Ducks - Aylesbury, Campbell (Khaki Campbell), Indian Runner, Muscovy, Pekin and derivatives and crossbreeds of these Geese - Brecon Buff, Chinese Commercial, Embdem, Roman, Toulouse and derivatives and crossbreeds of these Turkeys - Beltsville White, British White, Broadbreasted White, Bronze (Broadbreasted Bronze), Norfolk Black and derivatives and crossbreeds of these Fish Freshwater fish - Eels, salmon and trout and others recognised as food for human consumption are zero rated. Bream, perch, pike, carp and tench are standard rated. Shellfish - Oysters, mussels, whelks are zero rated while non food species are standard rated Fish for aquaria -All supplies are standard rated Fish used as bait - Fish of a kind, and fit for, human consumption are zero rated and all other supplies are standard rated. Ornamental fish - for example koi carp Agricultural and horticultural crops Crops covered by the relief All crops that are specifically grown to produce food of a kind for human consumption or animal feeding stuffs are zero-rated. The zero rate also applies to seeds, seedlings, crowns, spores, tubers and bulbs of edible vegetables and fruit. What’s not covered by the relief Any crop that generally produces items that are not fed to humans or animals is always standard-rated. Plants that are primarily grown for their ornamental effect (such as ornamental nursery stock including trees, shrubs, herbaceous plants, alpines and pot plants) are standard-rated. Plants, seeds and fruit of a kind used for the production of perfumes, pharmaceutical products, insecticides, fungicides and other non-food uses are standard-rated. Some examples of plants that are standard-rated are: Evening primrose, because this is grown for the extraction of its oil Tulips and Hyacinths, because these are grown and sold for ornamental purposes Norfolk reed, because this is grown for thatching material Sport, leisure, culture and antiques Betting and gaming — including pool betting and games of chance is Exempt from VAT Bingo — including remote games played on the internet, telephone, television or radio is Exempt from VAT Bingo — including remote games played on the internet, telephone, television or radio is Exempt from VAT Lottery ticket sales is Exempt from VAT Online lottery games is exempt from VAT Retailer commission on lottery ticket sales is Exempt from VAT Culture Admission charges by public authorities or eligible cultural bodies to certain cultural events such as visits to museums, art exhibitions, zoos and performances is Exempt from VAT Antiques Antiques, works of art or similar (as assets of historic houses) sold by private treaty to public collections are exempt from VAT Antiques, works of art or similar (as assets of historic houses) used to settle a tax or estate duty debt with HMRC again are exempt from VAT Health, education, welfare and charities Charities Admission charges by charities are Exempt from VAT Advertising services for charities VAT are zero rated Certain goods sold at charitable fundraising events are zero rated Charitable fundraising events are Exempt from VAT Charity shops — selling donated goods is zero rated for VAT Construction and sale of new buildings for a relevant charitable purpose are zero rated for VAT Energy-saving materials permanently installed in dwellings and buildings used for a relevant residential purpose providing the total cost of them (not including VAT) is not over 60% of the cost of the installation of the products (not including VAT) 5% reduced rate VAT applies. Energy-saving materials — supply only — are Standard-Rated (20%) Sponsored charitable events are Exempt from VAT. Voluntary donations to charities are outside the scope of VAT Welfare Building services for disabled people are zero rated for VAT Burial or cremation of dead people, or burial at sea is Exempt from VAT Mobility aids for the elderly, 5% reduced rate VAT applies Equipment for blind or partially sighted people is zero rated Equipment for disabled people is zero rated for VAT Funeral plans written under contracts of insurance are Exempt from VAT Smoking cessation products — nicotine patches and gum, 5% reduced rate VAT applies Welfare services provided by charities at significantly below cost are Outside the scope of VAT Magnetic tape adapted for recording speech for blind people together with apparatus for making and playing the adapted tape and certain low vision aids are zero rated. Health Care or medical treatment provided by a qualifying institution like a hospital, hospice or nursing home are Exempt Dispensing of prescriptions by a registered pharmacist is zero rated for VAT Health services provided by registered doctors, dentists, opticians, pharmacists and other health professionals is Exempt from VAT Incontinence products are zero rated. Maternity pads are zero rated Sanitary protection products are zero rated Low vision aids are zero rated Education Education and vocational training provided by an eligible body other than a ‘private school’. Goods or services closely connected to the education provided by an eligible body like a school, college or university is Exempt from VAT. VAT Notice 701/30 Building and construction Substantial reconstructions to protected buildings that are buildings used as a dwelling, for a relevant residential purpose or for a relevant charitable purpose is zero rated VAT Notice 708 The installation of a bathroom or lavatory, constructing ramps and widening doorways or passageways for disabled people in their own home is zero rated Building services for disabled people Construction and first freehold or long leasehold sale of a new building for a relevant charitable purpose is zero rated. VAT Notice 708 Construction and first freehold or long leasehold sale of a new building for relevant residential purposes is zero rated. VAT Notice 708 Construction and first freehold or long leasehold sale of new domestic buildings is zero rated. VAT Notice 708 Converting existing premises by increasing the number of dwellings within the building, 5% VAT applies. VAT Notice 708 Renovating a dwelling that has been empty for at least 2 years 5% VAT applies. VAT Notice 708 First freehold or long leasehold sale of a commercial building converted into a dwelling or dwellings is zero rated. VAT Notice 708 First freehold or long leasehold sale of buildings converted for relevant residential purposes is zero rated. VAT Notice 708 First freehold or long leasehold sale of buildings converted for relevant charitable purposes is zero rated. VAT Notice 708 Land and property Garages or parking spaces let together with dwellings (under short hold tenancy agreements) for permanent residential use are Exempt from VAT. — VAT Notice 742 Parking — grant, or licence, to occupy land on which incidental parking takes place is Exempt from VAT. VAT Notice 742 Property, land and buildings — grant, or licence, to occupy land or buildings is Exempt from VAT. VAT Notice 742 Sale or long lease of a new dwelling with garage or parking space is zero rated for VAT. VAT Notice 708 Transport, freight, travel and vehicles Transport Aircraft repair and maintenance is zero rated for VAT. VAT Notice 744C Travel Houseboat moorings are Exempt from VAT. VAT Notice 742 Parking spaces or garages supplied with houseboat moorings are Exempt from VAT. VAT Notice 742 Passenger transport in a vehicle, boat or aircraft that carries not less than 10 passengers is zero rated for VAT. VAT Notice 744A Tolls for bridges, tunnels and roads operated by public authorities is Outside the scope of VAT. Privately-operated tolls for bridges, tunnels and roads are standard-rated — VAT Notice 700 Freight Freight transport to or from a place outside the UK is zero rated for VAT. Domestic freight transport is standard-rated, unless it is the domestic leg of freight transport between the UK and another country in which it is zero rated. — VAT Notice 744B Freight containers — sale, lease or hire to a place outside the UK and the EU is zero rated. VAT Notice 703/1 International freight transport that takes place in the UK and its territorial waters is zero rated. VAT Notice 744B Vehicles Aircraft repair and maintenance is zero rated. VAT Notice 744C Airships — sale or charter is zero rated. VAT Notice 744C Caravans (more than 7 metres long or more than 2.55 metres wide) is zero rated or 5%. Taxing holiday caravans Civil aeroplanes — sale or charter is zero rated for VAT. Gliders — sale or charter — are standard-rated as are hot air balloons — VAT Notice 744C Helicopters — sale or charter is zero rated for VAT. VAT Notice 744C Houseboats — sale or let out on hire is zero rated for VAT, But holiday accommodation let in a moored houseboat is standard-rated — VAT Notice 701/20 Military aeroplanes — sale or charter is zero rated for VAT. VAT Notice 744C Ship repairs and maintenance is zero rated for VAT. VAT Notice 744C Shipbuilding — 15 tons or over gross tonnage is zero rated for VAT. VAT Notice 744C Printing, postage, publications — books, magazines and newspapers Printing Brochures is zero rated for VAT. VAT Notice 701/10 Leaflets is zero rated for VAT. VAT Notice 701/10 Pamphlets is zero rated for VAT. VAT Notice 701/10 Postage Direct-mail postal services meeting all the conditions of VAT Notice 700/24 3.2 and 3.3 are Outside the scope of VAT. VAT Notice 700/24 Postage, packing and delivery within the UK included in the sales contract but charged for separately, for example, mail order The same rate as the goods being delivered or posted Postage, packing and delivery within the UK charged as an optional extra is always standard-rated — VAT Notice 700/24 Public postal services provided by the Royal Mail under a universal service obligation are Exempt from VAT. Standard Royal Mail first and second class services for example Other postal services that are not subject to a universal service obligation are Standard-Rated (20%) Supplies that are not subject to regulation Publications Books are zero rated for VAT. VAT Notice 701/10 Children’s painting and picture books are zero rated for VAT. VAT Notice 701/10 Maps and charts are zero rated for VAT. VAT Notice 701/10 Magazines are zero rated for VAT. VAT Notice 701/10 Newspapers are zero rated for VAT. VAT Notice 701/10 Printed or copied music are zero rated for VAT. VAT Notice 701/10 Publications are zero rated for VAT. Some items are standard-rated such as exercise books, letterheads, posters — VAT Notice 701/10 Clothing and footwear, protective and safety equipment Clothing and footwear Babywear is zero rated for VAT. VAT Notice 714 Children’s clothes and footwear is zero rated for VAT. VAT Notice 714 Protective and safety equipment Carrycots with restraint straps, 5% VAT applies. VAT Notice 701/23 Children’s car seats, booster seats and booster cushions , 5% VAT applies. VAT Notice 701/23 Children’s safety seats with bare wheeled framework, 5% VAT applies. Prams and pushchairs are standard-rated (20%) — VAT Notice 701/23 Cycle helmets — CE marked are zero rated for VAT. VAT Notice 701/23 Motorcycle helmets that meet safety standards are zero rated for VAT. VAT Notice 701/23 Protective boots and helmets for industrial use are zero rated for VAT. VAT Notice 701/23 Open Government Licence v3.0

Find out how VAT works in Italy including, VAT Registration, VAT Rates, General VAT rules, Accounting for and Paying VAT, How to Recover VAT on Expenses, VAT Returns, VAT Exemptions, VAT Grouping Rules. Introduction Value Added Tax (VAT) is a consumption tax that applies to the supply of goods and services carried out in Italy by entrepreneurs, professionals, or artists and on importations carried out by anyone. In some cases, also Intra-Community acquisitions are subject to Vat. In Italy the standard Vat rate is 22% and reduced rates are provided for several supplies of goods and services, such as 4% for listed food, drinks and agricultural products or 10% for electric power supplies for listed uses and listed drugs. Specific supplies of goods and services expressly listed in Presidential Decree n. 633/72 are exempt from Vat, for example education, insurance services, specific financial services, supply, leasing of particular immovable property. n Italy, Value Added Tax is known as IVA (Imposta sul Valore Aggiunto). As of January 1, 2026, Italy has implemented a significant structural reform with the introduction of the "Testo Unico IVA" (New Consolidated VAT Code), which simplifies decades of fragmented legislation into a single framework. 1. VAT Rates in 2026 Italy maintains four main VAT rates, though specific categories—particularly for art and collectibles—saw updates in late 2025. RateCategoryExamples 22%StandardElectronics, clothing, cars, professional services, luxury goods. 10%ReducedHotels/tourism, restaurant services, passenger transport, domestic electricity/gas. 5%Social/HealthSocial welfare services, certain medicines, and art/antiques/collectibles (as of July 2025). 4%Super-ReducedBasic groceries (bread, milk), books/newspapers (physical and digital), medical aids for the disabled. 0%Zero-RatedExports outside the EU and intra-EU B2B supplies. 2. VAT Registration Requirements Italian law distinguishes between resident and non-resident businesses. Italian Residents: There is a VAT registration threshold of €85,000. Businesses earning below this can operate under the "flat-rate scheme" (Regime Forfettario), which exempts them from charging IVA but prevents them from reclaiming input VAT. Non-Resident EU Businesses: Must register for an Italian VAT number if they store stock in Italy (e.g., using Amazon FBA) or exceed the €10,000 EU-wide distance selling threshold (unless using the OSS system). Non-EU Businesses: There is no registration threshold. Any taxable activity in Italy requires immediate registration. Fiscal Representative: Non-EU companies must appoint a local "Fiscal Representative" who is jointly liable for VAT debts. Bank Guarantee: From mid-2025, non-EU entities engaging in intra-EU trade from Italy must provide a €50,000 bank guarantee to register for the VIES system. I 1. VAT-Exempt Transactions (Art. 10 DPR 633/72)4 These activities are "in scope" for VAT but are legally exempted for social or economic reasons. Key Drawback: If your business only performs exempt activities, you generally cannot deduct input VAT on your purchases.5 CategoryTypical Exemptions HealthcareServices provided by doctors, nurses, and hospitals; diagnostic exams and specific medical treatments. EducationSchooling, university courses, and professional vocational training provided by recognized institutions. Finance & InsuranceGranting of loans, bank account management, insurance premiums, and stock brokerage. Real EstateMost residential leases and sales of "old" residential buildings (unless the seller opts for taxation). Culture & SportsServices provided by recognized non-profit cultural associations or amateur sports clubs. GamblingLotteries, betting, and authorized gaming activities. 3. Compliance and Filing The 2026 reform places a heavy emphasis on digital transparency and real-time reporting. Mandatory E-Invoicing (Fatturazione Elettronica) Italy is a pioneer in e-invoicing. All B2B and B2C invoices must be issued in a specific XML format via the government's SdI (Sistema di Interscambio) portal. Paper invoices are generally not legally valid for VAT purposes. Filing Deadlines LIPE (Periodic VAT Settlements): Submitted quarterly to summarize the VAT credit/debit position. Q1: May 31 Q2: Sept 30 Q3: Nov 30 Q4: Feb 28 (of the following year) Annual VAT Return (Dichiarazione IVA): A comprehensive summary due between February 1st and April 30th of the following year. Intrastat: Monthly or quarterly reports required for goods/services traded with other EU member states. 4. Key Mechanisms for Businesses To understand how VAT moves through the Italian system, it is helpful to visualize the "Reverse Charge" and "Split Payment" mechanisms used to prevent fraud. Reverse Charge: Used in specific sectors (like construction or electronics) and cross-border B2B transactions. The buyer, rather than the seller, accounts for the VAT. Split Payment: Primarily for businesses selling to Public Authorities. The authority pays the net amount to the business and pays the VAT directly to the Treasury. 5. Penalties for Non-Compliance Italy has some of the highest VAT penalties in the EU. Failure to file: 120% to 240% of the VAT due. New 2026 Fast-Track Assessment: The Italian Revenue Agency can now use e-invoice data to automatically assess VAT due if an annual return is omitted. If you pay within 60 days of this assessment, penalties are reduced to 40%. In Italy, VAT grouping—known as Gruppo IVA—is a regime that allows legally independent but closely linked entities to be treated as a single taxable person. With the implementation of the 2026 VAT Reform (Testo Unico IVA), the rules for VAT groups have been consolidated into the primary code, maintaining the "All-In/All-Out" principle while streamlining the digital reporting requirements. 1. The Core Benefits Irrelevance of Intra-group Transactions: Sales of goods or services between members of the same VAT group are out of scope for VAT. No VAT is charged, and no e-invoices are required between members (though internal records must be kept). Cash Flow Optimization: Instead of one company waiting for a refund while another pays the treasury, the group nets out all credits and debits, paying only the balance. Single Compliance Point: The group files one consolidated quarterly settlement (LIPE) and one Annual VAT Return. . VAT Recovery for Italian-Registered Entities If you have an Italian VAT number (direct identification, fiscal representative, or local subsidiary), you recover VAT through deduction. Mechanism: You subtract the VAT paid on your purchases (Input VAT) from the VAT collected on your sales (Output VAT) in your periodic settlements (LIPE). The "VX" Schedule: If you end the year with a credit (more Input than Output), you declare this in the VX schedule of your Annual VAT Return. Options for Credits: Carry Forward: Use the credit to offset VAT debts in the following year (most common). Horizontal Offsetting: Use the VAT credit to pay other taxes (e.g., INPS social security or IRPEF). Refund Request: Request a cash payment. Important (2026 Update): To request a refund or offset credits exceeding €30,000, you must obtain a "Visto di Conformità" (Compliance Seal) from a certified Italian accountant. Without this seal, the Agency will likely block the refund for a manual audit. 2. VAT Refunds for Non-Established EU Businesses If your company is based in the EU but has no Italian VAT registration, you use the 8th Directive procedure. How to Apply: You do not apply to Italy directly. You submit the claim through the electronic portal of your home country’s tax authority. Deadline: September 30th of the year following the expense. Thresholds: Quarterly claims: Minimum €400. Annual claims: Minimum €50. Timeline: The Italian authorities have 4 months to approve or reject the claim (extended to 8 if they request more info). 3. VAT Refunds for Non-EU Businesses Non-EU businesses (e.g., US, China) use the 13th Directive procedure. This is the most complex route. Reciprocity Required: Italy only grants refunds to non-EU countries that offer similar rights to Italian companies. This currently includes the UK, Switzerland, Norway, and Israel. The "Form IVA 79": You must submit this form in Italian or English to the Centro Operativo di Pescara. Mandatory Documents: Original paper invoices (digital copies are often rejected for non-EU entities). Proof of payment for every invoice. A "Certificate of Status" from your home tax authority. Deadline: September 30th of the following year. 4. Refundable vs. Non-Refundable Expenses Italy is notoriously strict about what qualifies for recovery. Expense CategoryRecovery Status Business Travel (Trains/Planes)100% Recoverable Hotel & Accommodation100% Recoverable (if for business) Business Meals100% Recoverable (must be documented) Cars (Purchase/Fuel/Lease)40% Recoverable (Standard "promiscuous use" rule) Entertainment/GiftsGenerally 0% (unless below €50) Mobile Phones50% Recoverable (fixed statutory limit) VAT Registration VAT Rules & Rates VAT Exemptions Paying VAT VAT Returns VAT Grouping VAT Recovery Annual Payment Advance Payment Periodic Payment Italy-VAT

Find out how VAT works in the UAE including registering for VAT, VAT for different sectors, filing a VAT Return Introduction VAT (Value Added Tax) is a consumption tax that was introduced in the UAE on 1 January 2018. The rate of VAT is 5 per cent. Click on the buttons below for more details. VAT Information & Rules UAE VAT

Barter and Part Exchange - Comprehensive VAT Guide on the rules and HMRC guidance relating to barter and part exchange transactions between business in the United Kingdon. Introduction Similar to many other transactions, Barter and Part Exchange are taxable and treated as follows: Barter Transaction A barter transaction occurs where one party supplies goods or services in exchange or payment for other goods or services. The tax point for such transactions is when the transaction takes place. The nature of barter transactions is that two supplies are made as follows: A supply from one supplier to the customer A supply from the customer to the supplier VAT Liability The VAT liability of barter transactions is based on the arms length value of each item bartered. Basically the market price that would have been paid had the goods or services been purchased and sold without bartering. Part Exchange Part exchange follows the sames rules as transactions traded using barter. Set Offs A set off occurs where one individual owes another for a service provide or goods sold and both parties agree for the owing party to provide a service to clear the debt. For example an Accountant maybe owed money by his client who is a butcher and both agree for the butcher to provide the accountant with 2 months worth of Steak to settle. Here the tax point occurs when an invoice is issued or the set off is recorded in the accounting records of the parties. VAT Liability Again two separate supplies have been made and both parties will have to account for VAT regardless of whether any cash has been paid. -Contains public sector information licensed under the Open Government Licence v3.0. Barter & Part Exchange - VAT Guide for Barter Transactions

Comprehensive guide on Singapore GST - Find out how GST works in Singapore, GST Registration, invoicing for GST, business sectors, VAT in the digital economy Introduction Goods and Services Tax (GST) is a tax on consumption levied in Singapore by the Inland Revenue Authority on most supplies of goods and services including imports. I n Singapore, the Goods and Services Tax (GST) is a broad-based consumption tax. There are exemptions from GST on certain supplies of Financial Services, the sale and lease of Residential Property, Supply of Digital Payment Tokens etc. The export of goods and supply of services abroad are zero rated. Note: GST is known as VAT in other jurisdictions. VAT Rates Standard Rated 9% - Most local goods (electronics, clothes) and services (consultancy, dining). Zero-Rated 0% - Export of goods and international services (e.g., airfares, services for overseas clients). Exempt - Financial services (loans, life insurance), sale/lease of residential property, and digital tokens (Bitcoin). Out-of-Scope of GST - Sales where goods do not enter Singapore or private transactions. Note: If you provide zero-rated services, you charge 0% GST but can still reclaim the 9% GST you paid to your local suppliers. If you provide exempt services, you cannot reclaim that input tax. VAT Recovery Businesses in Singapore can recover input VAT on their purchases (local and imports) provided they make taxable sales. Visitors (tourists) to Singapore can recover a portion of the GST paid on your purchases through the Electronic Tourist Refund Scheme. VAT Groups In Singapore VAT Group Registration allows two or more companies to be treated as a single taxable person for GST purposes. This allows them to file a single group VAT return via a representative member (chosen company) and inter-group sales are disregarded for VAT and thus 9% VAT is not applied to inter- group invoicing . VAT Registration Thresholds The Inland Revenue Authority of Singapore (IRAS) monitors turnover on two bases: Compulsory Registration: You must register if your annual taxable turnover exceeds S$1 million. Retrospective: At the end of any calendar year, your turnover was >S$1 million. Prospective: You have reasonable grounds to expect your turnover will exceed S$1 million in the next 12 months (e.g., a signed contract). Voluntary Registration: If your turnover is below S$1 million, you can choose to register to claim back input tax. Condition: You must remain registered for at least 2 years. E invoicing The biggest change in 2026 is the mandatory shift to Invoice Now, Singapore’s national e-invoicing network based on the Peppol standard. Effective April 1, 2026: All new voluntary GST registrants must implement Invoice Now. Requirements: You must use an "InvoiceNow-ready" accounting solution to transmit invoice data directly to IRAS. Static PDFs or paper invoices are no longer sufficient for these registrants to remain compliant. Phasing: This follows the November 2025 mandate for newly incorporated companies. Existing registrants are expected to be onboarded in subsequent phases throughout 2026–2027. Other Compliance Rules Reverse Charges - If you are a GST-registered business (or a non-registered business with >S$1M turnover) and you import services from overseas (e.g., Google Ads, software subscriptions), you may be required to account for GST yourself via the Reverse Charge mechanism. Foreign Vendor Registration - businesses selling Digital Services or Low-Value Goods (valued ≤S$400) to Singaporean consumers must register for GST if their global turnover is >S$1M and their local B2C sales exceed S$100,000. For more information please see the Singapore Inland Revenue Authority Website - Goods & Services Tax (GST) Singapore-GST Guide - Understanding Singapore GST

Discover and understand the rules and requirements around VAT Invoicing, including what constitutes a valid VAT invoices, when must they be issued, tax point rules and much more. Introduction The creation and issuing of VAT invoices forms an integral part of the VAT reporting process and VAT Registered businesses must issue an invoice for any standard rated or reduced rate services they supply. The invoice then acts as evidence for the purchaser to enable them to recover the VAT charged from HMRC if they are registered for VAT and make taxable supplies themselves. Note: VAT invoices are not required to be issued for Exempt or Zero Rated Supplies. A VAT invoice must normally be issued within 30 days of the tax point arising. The 30 day time limit can be extended without applying to HMRC in the following cases: You’re awaiting VAT invoices from your own suppliers or sub-contractors An extension of the 14 day limit has already been approved Special accounting arrangements have been approved Where a business has been newly registered but have not been notified of your VAT registration number - 30 day rule starts from date the business is advised of their new VAT registration number Tax Point Rules Tax points are the specific points in time when sales of goods or services take place and are governed by rules set out by HMRC. VAT registered businesses must account for VAT within the period the tax points for their sales occur. So if a tax point occurs in March and the businesses next VAT return period is January to March then the VAT on the sale will have to be included within the VAT return quarter ending March. Basic Tax Point Goods - The date when you send them to your customer or the customer takes them away or for goods assembled at a suppliers premises, when the goods are made available to the customer Services - The date when the service is performed — it’s normally taken as the date when all the work except invoicing is completed Actual Tax Point The basic tax point will be overridden if an actual tax point is created. An actual tax point is created when: An invoice is issued or payment is received (whichever is first) before the basic tax point. An invoice is issued up to 14 days after the basic tax point You do not have to follow the 14 day rule, but if you decide not to you must tell HMRC by writing to the VAT Written Enquiries Team . If you wish to have an extension of the 14 day rule, then you must apply to HMRC by writing to the VAT Written Enquiries Team , giving your reasons. Note: Failure to tell HMRC about extending the 14 day rule will result in the tax point reverting to the basic tax point. Continuous Supplies of Services If you supply services on a continuous basis and receive payments regularly or from time to time, there’s a tax point every time you issue a VAT invoice, or receive a payment, whichever happens first. If payments are due to be made at regular intervals (for example, by banker’s order or direct debit), you can issue a VAT invoice at the start of any period of up to one year (provided that more than one payment is due in the period) to cover all the payments due in that period. For each payment you should set out the: VAT-exclusive amount Date on which the payment is due Rate of VAT VAT payable If you decide to do this, you do not have to account for tax on any payment until the date on which it is due, or date you receive it, whichever happens first. Your customer must not reclaim, as input tax, any VAT shown on the VAT invoice until the date on which the payment is due, or you have received the payment, whichever happens first. The same procedures apply to continuous supplies of goods, in the form of water, gas and electricity. Goods supplied on sale or return, approval or similar terms When you supply goods on sale or return, for example, they have not been sold and you still own them until such time as they’re adopted by your customer. Adoption means that the customer indicates a wish to keep them. Until your customer does so, your customer has an unqualified right to return them at any time, unless you have agreed a time limit. You may have fixed a time limit of adoption of less than 12 months from the date when the goods were sent. If a time limit has: Been fixed for a period of 12 months or less, then the Basic Tax Point is the date the time limit expires Not been fixed or fixed for a period of more than 12 months, then the Basic Tax Point is 12 months from the date when the goods were sent Note: In either case if your customer adopts the goods before the time limit expires the date of adoption becomes the basic tax point. Also the basis tax point as mentioned above will be overridden by the actual tax point on the date an invoice issued by the business providing the goods or the date payment is received for the goods, which ever is earlier. If you receive a payment which is not returnable, this will normally indicate that the goods have been adopted. The payment of a deposit required as a condition of delivery — which is repayable if the goods are returned — does not constitute adoption. Finally, It is a businesses responsibility to make sure that its customers notify them promptly when they have adopted goods. Goods taken for personal or other non-business use Goods that are taken out of a business: Permanently for non-business use will have a basic tax point on the date when the goods are taken or set aside for this purpose Temporarily for non-business use, but they’re still part of its stock or business assets, then a tax point is triggered each time they’re used or — if the non-business use continues over a period of time — on the last day of each tax period that the goods are used or made available for that purpose What Details are Required on an Invoice A sequential number based on one or more series which uniquely identifies the document The time of the supply (tax point) The date of issue of the document (where different to the time of supply) Your name, address and VAT registration number — you may issue invoices under a trading name, but you must show the name and address under which you’re registered for VAT somewhere on the document The name and address of the person to whom the goods or services have been supplied (your customer) A description sufficient to identify the goods or services supplied For each description, the quantity of the goods or the extent of the services, the rate of VAT, and the amount payable excluding VAT — this can be expressed in any currency The gross total amount payable, excluding VAT — this can be expressed in any currency The rate of any cash discount offered The total amount of VAT chargeable — this must be expressed in sterling The unit price Invoicing in a foreign currency For VAT Invoices issued in a foreign currency for supplies of goods or services that take place in the UK, the total amount of VAT payable must be converted into sterling. This must be done on the following basis: (a) unless you have adopted one of the alternatives set out in (b) or (c), you must use the UK market selling rate at the time of the supply — the rates published in national newspapers will be acceptable as evidence of the rates at the relevant time (b) as an alternative, you may use the period rate of exchange published by HMRC for customs purposes — the VAT general enquiries helpline can give you details of particular period rates, you may adopt this alternative for all your supplies or for all supplies of a particular class or description — if you opt for only a particular class or description, you should make a note of the details in your records at the time of adoption You do not need to notify HMRC in advance if you wish to adopt this alternative, but having made such an option, you cannot then change it without first getting agreement by writing to the VAT Written Enquiries Team (c) you may apply in writing to the VAT Written Enquiries Team to use a rate — or method of determining a rate — which you use for commercial purposes but which is not covered by (a) or (b) In considering whether to allow such applications, HMRC will take into account: Whether the proposed rate or method is determined by reference to the UK currency market Whether it is objectively verifiable The frequency with which it’s proposed to update it (forward rates or methods deriving from forward rates are not acceptable) Whatever rate or method you adopt, the appropriate rate for any supply is that current at the time of the supply. Credit Notes Where businesses need to correct mistakes or make changes to the amounts charged on VAT invoices already issued to customers, they can do this by raising a credit note. This will have the effect of either decreasing or simply cancelling the values on a invoice previously issued to a customer. To raise a credit note and for it to be valid, the following conditions must be met : Reflect a genuine mistake or overcharge or an agreed reduction in the value of the supply, and be issued within 14 days of the refund payment being made to the customer Give value to the customer, that is, represent a genuine entitlement (or claim) on the part of the customer for the amount overcharged either to be refunded or offset against the value of future supplies Details Required on a Credit Note The identifying number and date of issue The name, address and registration number of the supplier The name and address of the customer A description which identifies the goods or services for which credit is being claimed or allowed The quantity and amount for each description The total amount credited, excluding VAT The rate and amount of VAT credited (expressed in sterling) The number and date of the original VAT invoice or invoices relating to the supply — if you cannot do this (for example, because returned goods cannot be identified with a particular invoice), you must be able to satisfy HMRC by other means that you accounted for VAT on the original supply Credit Notes Issued Without VAT Adjustment If credit notes are issued without a VAT adjustment, they should state ‘This is not a credit note for VAT’. Even if you and your customer decides not to adjust the VAT on credit notes which pass between you, you will still need to adjust your records of outputs and inputs in order to complete your VAT Return. Debit Notes Where businesses need to correct mistakes or make changes to increase amounts charged on VAT invoices already issued to customers, they can do this by raising a debit note. This will have the effect of either increasing or simply cancelling the values on a invoice previously issued to a customer. To raise a debit note and for it to be valid, the following conditions must be met : Reflect a genuine mistake or undercharge or an agreed increase in the value of the supply, and be issued within 14 days of the increase being agreed between the supplier and the customer Details Required on a Debit Note Identifying number and date of issue Name, address and registration number of the supplier Name and address of the customer Identifying number and date of issue of the VAT invoice or invoices relating to the supply for which there is an increase in price A description sufficient to identify the goods or services supplied to which the increase in price applies The amount of the increase in price, excluding VAT The rate and the amount of VAT debited (expressed in sterling) Note: Credits for zero-rated or exempt supplies included in a credit or debit note must be totaled separately and the note must show clearly that no VAT credit has been allowed for them. Electronic Invoicing As the Global Financial System continues to become more integrated and digitalised, many companies are adopting to invoice their clients electronically. From a HMRC perspective, Electronic invoicing is acceptable provided the invoices continue to meet the same invoicing requirements as manual invoices. Companies do not have to inform HMRC that they intend to start issuing electronic invoices but must adhere to the same rules as manual / physical invoicing. Electronic Invoicing is basically the generation, storage and transmission of invoices electronically without the need for paper invoices. This has the benefit of improving a transactions audit trail, reducing storage space, speedy retrieval and better security etc. Conditions For Electronic Invoicing You can find out more about the HMRC conditions for electronic Invoicing and storage in the following HMRC Notice. Electronic invoicing (VAT Notice 700/63) -Contains public sector information licensed under the Open Government Licence v3.0. VAT Invoicing - Guide on the HMRC Rules and Tax Points

VAT Guide - Rules on how to correct errors you discover and whether you can correct them on your VAT return or by Error Correction Notices submitted to HMRC Introduction Whilst VAT errors will occur in most businesses from time to time, it should be a key priority of a business to ensure there are robust controls within its VAT reporting process to minimise and mitigate against such errors. Failure to do so, can result in repetitive errors and the need to submit Error Correction Notices (ECN's) to HMRC which can result in penalties and cause reputational damage to the business. Examples of such errors can range from: The amount of VAT payable or receivable being recorded incorrectly within the accounting system Incorrect amounts of output VAT paid or Input VAT recovered from HMRC on previous returns Failure to keep up to date with Legislative changes and as such incorrect VAT rates or treatments applied to transactions VAT Errors can be broken down in to two categories: Errors Made in the Current VAT Return period These are errors made and discovered within the current VAT reporting period prior to submitting the current quarters VAT return. For such errors, corrections should be made within the systems in the same period to ensure the correct VAT is reported on the VAT return sent to HMRC. Errors Discovered that Relate to Prior VAT Return Periods up to 4 Years old Errors found up to four years old from the return period of discovery can be corrected using one of the two methods detailed below depending on the value of the error. Methods for Correcting Errors Method (1) Using method 1, corrections for errors on past returns can be made on the current quarters returns provided the net value (box 1 / box 4) of the errors does not exceed : £10,000 Between £10,000 and £50,000 but does not exceed 1% of the box 6 figure on the current period return. Where errors do not meet the above conditions, then method 2 must be used. Note: Method 2 must be used where it is discovered that the error was deliberately made. Method (2) Method 2 must be used where the net value of the errors: Is between £10,000 and £50,000 but greater than 1% of the box 6 figure of the current quarters VAT returns Is greater than £50,000 Errors on previous returns were made deliberately To use method 2, a business must make an Error Correction Notice by completing the HMRC online form or in writing. See link below. How to correct VAT errors and make adjustments or claims ... Note: Businesses can use Method 2 even where the net value of errors does not exceed £10,000 or are between £10,000 and £50,000 but not greater than 1% Output VAT Output VAT will either be over declared or under declared in previous VAT returns and thus a payment will either be due or a refund from HMRC following submission of a Error Correction Notice (ECN). Input VAT Input VAT will either be over or under recovered on previous VAT returns and thus a payment will either be due or a refund due from HMRC following submission of an Error Correction Notice (ECN). Note: If an invoice was received from a supplier with VAT in a previous VAT return period but the VAT was not recovered in that period, then the input VAT will need to be recovered via Error Correction Notice and not included in the next return. Time Limits for Making The time limit for correcting errors is 4 years from the period the error was discovered. So for errors discovered in April 2022, corrections can be made for periods going back to April 2018. Adjustments That are Not Errors There are a number adjustments that are part of the normal accounting and VAT reporting process and are not errors as described above and examples are listed below: Issue of debit and credit notes Capital Good Scheme Adjustments Partial Exemption Adjustments Bad Debt Relief Adjustments Protective Claims There is also the facility for businesses to submit Protective Claims to HMRC where there is a potential over payment of Output VAT or under recovery of Input VAT but there is a risk that Error Correction Notices will not be submitted by the business on time to prevent the claims going outside the 4 year time limit cap. Protective claims will often be submitted to HMRC where: The business is still in the process of collating the information required to submit an ECN to recover VAT from HMRC. There are differences of opinion on specific treatments for VAT and the business is discussing or challenging HMRC's position. There are collective industry claims or challenges at VAT Tribunals or in the courts and the outcomes are not imminent There are ongoing competitor claims or challenges against HMRC positions in the UK courts. -Contains public sector information licensed under the Open Government Licence v3.0. VAT Errors - Guide on How to Correct Errors

Self Billing Agreements - VAT Rules, Annual Review, Reverse Charge Procedure, Record Keeping I ntroduc t ion Self-billing is an arrangement between a supplier and a customer. Both customer and supplier must be VAT registered. The customer prepares the supplier’s invoice and forwards a copy to the supplier with the payment. If you want to put a self-billing arrangement in place you do not have to tell HMRC or get approval from them. You do have to: Get your supplier or customer to agree to the arrangement Meet certain conditions If You Are The Customer Rules for Self-Billing You can set up self-billing arrangements with your suppliers as long as you can meet certain conditions, you’ll need to: enter into an agreement with each supplier review agreements with suppliers at regular intervals keep records of each of the suppliers who let you self-bill them make sure invoices contain the right information and are correctly issued Your suppliers do not have to be based just in the UK. You can self-bill businesses in other countries. You must not issue self-billed invoices to a supplier who has changed their VAT registration number until you’ve prepared a new self-billing agreement for them. If a supplier stops being registered for VAT then you can continue to self-bill them, but you cannot issue them with VAT invoices. Your self-billing arrangement with that supplier is no longer covered by the VAT regulations. Reverse C harg e Procedure There are special rules if you have a self-billing arrangement and you are involved in transactions that the reverse charge arrangement for business-to-business supplies of mobile telephones and computer chips applies to. Self-B illing Agreements You can only have a self-billing arrangement if your supplier agrees to put one in place. If you do not have an agreement with your supplier your self-billed invoices will not be valid VAT invoices – and you will not be able to reclaim the input tax shown on them. You’ll both need to sign a formal self-billing agreement . This is a legally binding document. The agreement must contain: Your supplier’s agreement that you, as the self-biller, can issue invoices on your supplier’s behalf Your supplier’s confirmation that they will not issue VAT invoices for goods or services covered by the agreement (because you’ll be issuing the invoices for them) An expiry date – usually for 12 months time but it could be the date that any business contract you have with your supplier ends Your supplier’s agreement that they’ll let you know if they stop being registered for VAT, get a new VAT registration number or transfer their business as a going concern Details of any third party you intend to outsource the self-billing process to You’ll need to set up a new agreement if your supplier transfers their business as a going concern and both you and the new business owner want to carry on with self-billing. Bear in mind that countries can set their own conditions for self-billing. So you’ll need to make sure that any agreement you draw up for a supplier in another country meets those conditio ns as well. If an HMRC officer wants to see the agreement you must show it to them. Reviewing S elf-Billing Agreements Self-billing agreements usually last for 12 months. At the end of this you’ll need to review the agreement to make sure you can prove to HMRC that your supplier agrees to accept the self-billing invoices you issue on their behalf. It’s very important that you do not self-bill a supplier when you do not have their written agreement to do so. You will not normally need to review an agreement if you provide self-billed invoices to a supplier for less than 12 months. Record keeping If you are a self-biller you’ll need to keep certain records. These are: copies of the agreements you make with your suppliers the names, addresses and VAT registration numbers of the suppliers who have agreed that you can self-bill them You’ll still be responsible for keeping these records if you outsource self-billing to a third party provider. If you do not keep the required records, then the self-billed invoices you issue will not be proper VAT invoices. Self-B illing Invoice s Once you’ve got a self-billing agreement with a supplier, you must issue self-billed invoices for all the transactions with them during the period of the agreement. As well as all the details that must go on a full VAT invoice you’ll also need to include your supplier’s: name address VAT registration number All self-billed invoices must include the statement ‘The VAT shown is your output tax due to HMRC’. Remember that you do not add any VAT to self-billed invoices that you issue to suppliers who are not VAT registered. Reclaiming Input T ax You’ll only be able to reclaim the input tax shown on self-billed invoices if you meet all the record keeping requirements. When you can reclaim the input tax depends on the date when the supply of the goods or services takes place for VAT purposes. Normally the date of supply for VAT purposes is the actual date when the goods or services are provided to you, the customer. But if you issue a self-billed invoice within 14 days of this date of supply, then the date you issue the invoice becomes the date of the transaction for VAT purposes. This determines which VAT Return you put the transaction on, and if there is a VAT rate change, it determines which VAT rate applies to the invoice. If You’re A VAT-Registered Supplier Setting Up A Self-Billi ng Arr angement If one of your customers wants to set up a self-billing arrangement with you, they’ll ask you to agree to this in writing. If you agree, they’ll give you a self-billing agreement to sign. The terms of the agreement are a matter between you and your customer, but there are certain conditions you’ll both have to meet to make sure you comply with VAT regulations. For VAT purposes you’ll have to do all of the following: sign and keep a copy of the self-billing agreement agree not to issue any sales invoices to your customer for any transaction during the period of the agreement agree to accept the self-billing invoices that your customer issues tell your customer at once if you change your VAT registration number, cancel your VAT registration, or transfer your business as a going concern Accounting For The Output Tax The VAT figure on the self-billed invoice your customer sends you is your output tax. When you have to account for this to HMRC depends on the date of supply of the goods or services for VAT purposes. This date of supply is normally the date when you actually provide the goods or services to your customer, so you might have to account for the VAT before you’ve received the self-billed invoice or been paid. You are accountable to HMRC for output tax on the supplies you make to your customer, so you should check that your customer is applying the correct rate of VAT on the invoices they send you. If there has been a VAT rate change, you will need to check that the correct rate has been used. If you’re a supplier who receives electronic self-billed invoices from a customer in another country you’ll need to make sure that: they issue the invoices in a format that’s acceptable to HMRC your accounting systems can accept the invoices Take care not to treat self-billed invoices as purchase invoices and reclaim the VAT shown as your input tax. If you do incorrectly treat the VAT as input tax you’ll have to correct the mistake. Detailed information about self-billing Find out how customers and their suppliers must treat VAT if they’re using self-billing arrangements in VAT Notice 700/62 . Self Billing and VAT

Read our Comprehensive Europe VAT guide including the One Stop Shop process, Cross Border VAT Refund for EU businesses, Small Business Scheme, VAT in the Digital Age etc. Europe VAT Guide - Europe VAT - Guide for Businesses Operating in the EU European Union The European Union (EU) is a political and economic union of 27 countries. It comprises a single market which allows free movement of goods, capital, services and people between member states. The EU countries include: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden. Value Added Tax (VAT) The Value Added Tax (VAT) is a consumption tax levied on nearly all goods and services bought and sold and brought into the EU and is ultimately borne by the final consumer. VAT is charged, at the applicable rate, on the sales price of the goods or services. VAT is collected at each stage along the supply chain. It is charged on the value added to goods and services at each stage of production and distribution based on a standard set of invoicing rules. Each EU country is responsible for setting their own VAT rates but the standard rate cannot be less than 15% and the reduced rates cannot be less than 5%. VAT-registered businesses can deduct the VAT they have incurred on purchases from other EU & Non EU businesses from the VAT they have collected from businesses they have sold goods or services to. This means where a business makes purely taxable sales (not Exempt) they are tax neutral in that there is no VAT loss or P&L VAT cost. Note: VAT is not charged on exports to countries outside the EU. VAT in The Digital Age (VIDA) Europe VAT in The Digital Age is an EU package adopted in March 2025 which aims to modernise the VAT system in line with digitalisation, reduce fraud and make the system more efficient for businesses. The package is made up of 3 main pillars with an implementation timeline between 2025 to 2035 an include: Real time Digital Reporting Requirements for cross border (B2B) EU trade based on e-Invoicing using structured electronic invoices for real-time digital reporting.The timelines for implementation are (a) 14 April 2025 - EU Member States can introduce mandatory domestic e invoicing without requiring EU approval (b) 1 July 2030, E-invoicing will become mandatory for all cross-border B2B transactions in the EU. (c) 1 January 2035, all domestic e invoicing and reporting must align with the EU standard. Platform Economy - There will be new rules for online platforms in the short-term accommodation rental and passenger transport sectors. Platforms facilitating supplies in the passenger transport and short-term accommodation sectors will become responsible for collecting and remitting VAT to tax authorities when their users do not, for example because they are a small business or individual providers. This will become effective from 1 July 2028. Single VAT Registration - Building on the already existing ‘VAT One Stop Shop’ (OSS) model for e-commerce, the proposals would allow more businesses selling to consumers in another EU country to fulfil their VAT obligations via an online portal in one EU country. Further measures to improve the collection of VAT include making the ‘Import One Stop Shop’ (IOSS) mandatory for certain platforms facilitating sales by persons established outside the EU to consumers in the EU. This will become effective from 1 July 2028. EU Cross Border Refunds for EU Businesses EU businesses can claim and obtain refunds of VAT incurred in performance of their business in other EU member states where they do not supply goods and services.and are not VAT registered there. So in effect, businesses should not have been based in the respective EU Member State during the period the refund claim relates to, or supplied goods and services (including to customers required to apply the reverse charge procedure). Requests for refunds must be made to the claimants own country Tax Authority via their online portal where they will be checked for their validity and the claimants identity and VAT registration number will also be verified. Once verified, claims will be forwarded by the businesses Tax Authority to the Member State where the VAT was incurred provided: The claimant is a taxable person Does not supply only exempt goods and services Is not covered by the special scheme for small business Is not covered by the flat rate scheme for Farmers For more information on the refund procedure, see the Summary of VAT refund procedure Source; European Commission EU Changes From 1 January 2025 Place of supply for Virtual / live Streamed Events On 1 January 2025 EU VAT rules change for businesses providing virtual and streaming services for conferences, distant learning and other live events streamed online (with a fee for viewing). From 1 Jan 2025, EU countries must apply the 'where services are consumed' rule and VAT will be accountable in the country of the recipient of these services. This change basically aligns the VAT treatment of virtual services with electronically supplied / digital services. Currently the general B2C rule applies - so VAT is due the supplier's country. Businesses in the EU providing these services will need to update their billing systems to reflect this change so that VAT will not be applied locally. Recipients of these services will need to ensure they account for VAT locally on these services. Small Business (SME) VAT Exemption Scheme From 1 January 2025, the special VAT regime (the SME scheme) allows small enterprises to: sell goods and services without charging VAT to their customers (VAT exemption) and, alleviate their VAT compliance obligations. Small enterprises choosing VAT exemption will lose the right to deduct VAT on goods and services used to make exempt supplies. Who Can Benefit Any small enterprise with a total annual turnover of no more than EUR 100 000 (or the equivalent in national currency) in all Member States in the current calendar year and in the previous calendar year are eligible for the VAT exemption in its Member State of establishment (MSEST) and/or in other Member State(s) under the cross-border SME scheme. This is applicable only if the Member State concerned has implemented the scheme in its national legislation. The SME scheme is optional. Non-EU small enterprises cannot apply the SME scheme. In the context of the SME scheme, small enterprises established in the United Kingdom, including Northern Ireland, are non-EU small enterprises. New Maximum for National Annual Threshold The maximum national annual threshold set by Member States under which small enterprises can VAT exempt their supplies of goods and services under the SME scheme (domestic and cross-border) is EUR 85 000 (or the equivalent in national currency). Member States have the possibility to set more than one national annual threshold. These are called ‘sectoral thresholds’. In case a small enterprise can benefit from more than one sectoral threshold, the tax authorities will, based on its activities, inform the small enterprise about the threshold to use since only one threshold can be applied per taxable person. Cross Border Application Small enterprises established in another Member State than where VAT is due can VAT exempt their supplies (cross-border), in the same way that small enterprises established in that Member State already can for domestic transactions. This will help place all small enterprises on an equal footing, whether they are based in that Member State or not. For more information please use this link - VAT rules for small enterprises One Stop Shop Scheme The EU One Stop Shop scheme allows online sellers, including online marketplaces and platforms to register in one EU Member State (member state of identification) for the declaration and payment of VAT on all distance sales of goods and cross-border supplies of services to consumers within all EU member states. This option therefore removes the need for online sellers / marketplaces / platforms to register and declare VAT in each EU country where they have made distant sales. This therefore reduces the administrative burden for taxable businesses making cross border sales from outside or within the EU. The One Stop Shop consists of three optional schemes namely Non-Union (OSS) Scheme - Is for Non EU Businesses (Company, Partnership, Sole Trader) that do not have an established place of business in the EU or a fixed establishment in the EU and provide Business to Consumer (B2C) services in the EU such as accommodation, transportation, admission to events Union (OSS) Scheme - Is for EU e-commerce businesses that have an established place of business in EU or have a fixed establishment) selling B2C goods or services within the EU. Services such as telecommunications, broadcasting, or electronically supplied services and intra-Community distance sales of goods. Import (IOSS) Scheme. Is for EU established or non EU established businesses that sell low value goods of up to 150 euros imported into the EU. Note - for businesses that are not established in the EU, are required to appoint a representative or intermediary before they can use the IOSS scheme. Registration for IOSS To use the Import One-Stop Shop, the company carrying out distance sales of goods imported from third territories, or third countries must register in the Member State where it has established its business, or, if it has established its business outside the Community, in one of the Member States where it has a fixed establishment. There are no VAT advantages in choosing one Member State over the other. VAT Return A taxable person using the IOSS is required to submit a monthly VAT to the Member State of Identification detailing: Total taxable amount for each product supplied to each Member State in which the dispatch or transport of the goods to the customer ends. VAT amount 3) VAT rate The import declaration shall contain the valid IOSS Identification number of the taxable person or of the appointed Intermediary established in the Union. Member State of Identification tax authorities provide the VAT return information to each Member State mentioned on the VAT return in which the dispatch or transport of the goods to the customer ends. VAT Payments The company pays the VAT declared in its VAT return, to the Member State of Identification tax authorities. Member State of Identification distributes the VAT to the Member States mentioned on the VAT return. Registration Process Direct Registration in the Member State of Establishment Any taxable person who carries out distance sales of goods imported into the EU from a third territory or a third country in consignments with an intrinsic value not exceeding EUR 150 can register for the Import scheme. If that person has no establishment in the EU, they need to appoint an Intermediary to be able to use the scheme. For the Import scheme, the Member State of Identification is the Member State in which the taxable person has established their business. About the Intermediary Taxable persons, suppliers, and electronic interfaces, which are not established in the EU or in a third country with which the EU has concluded a VAT mutual assistance agreement, need to appoint an Intermediary to be able to use the Import scheme. Other taxable persons, the ones established in the EU, are free to appoint an Intermediary, but are not obliged to do so. The Intermediary needs to be a taxable person established in the EU. They must fulfil all obligations laid down in the Import scheme for the supplier or electronic interface that appointed them, including the submission of IOSS VAT returns and payment of VAT on the distance sales of imported low value goods. Direct registration with Intermediary and in the Member State of Identification If the taxable person has not established their business in the EU, the Member State of Identification is a Member State in which the taxable person has a fixed establishment. Where the taxable person has more than one fixed establishment, that taxable person can choose any Member State in which they have a fixed establishment to be their Member State of Identification. I f the taxable person is established outside the EU, but in a third country with which the EU has concluded an agreement on mutual assistance for the recovery of VAT and makes distance sales of imported goods from that third country, they are free to choose any Member State as Member State of Identification. In this case, there is no need to appoint an Intermediary to be able to use the Import scheme. For more information please see link below to source information: IOSS Scheme - Customs & Tax EU Learning Portal Matrix of Supply Type and Applicable OSS Scheme Type of Supply Supplies of Services to Consumers (B2C) Distant supplies of goods by deemed suppliers Domestic supplies of goods by deemed suppliers Distant sales of imported goods from 3rd countries in consignments not more than EUR 150 Non - EU Established Entity Non Union Scheme (OSS) Union Scheme (OSS) Union Scheme (OSS) Import Scheme (IOSS) and Intermediary Required (Fiscal Rep) EU Established Entity Union Scheme (OSS) Union Scheme (OSS) Union Scheme (OSS) Import Scheme (IOSS) and Intermediary Required (Fiscal Rep)

Hotel La Tour Case - Recovery of VAT on Shares issued to Fund Acquisition Hotel La Tour Ltd vs HMRC Update - Supreme Court Appeal - judgement due on the 17 December 2025 - The Supreme Court unanimously dismisses the appeal and agrees with the court of appeal judgment that input VAT on professional advice was irrecoverable as there was a direct link between the professional fees and the sale of the shares. Please see link below to Supreme Court press release. https://supremecourt.uk/uploads/uksc_2024_0086_press_summary_be4fb03ee3.pdf Earlier Update - The Court of Appeal has overturned (23 May 2024) the below rulings in the FTT and UT on the basis that the purpose of the share sale was irrelevant. The key factor was that the input VAT incurred in relation to costs for advice in the run up to the share sale was directly linked to the Exempt sale of shares and as such was irrecoverable. It is possible that Hotel la Tour Ltd will request to have the case heard in the Supreme Court. FTT and UT Rulings below The Sale of Shares In a Subsidiary to Fund Business Expansion As illustrated in the case HMRC vs Hotel la tour , it is possible to recover input VAT on costs related to the sale of shares in a subsidiary which will be used to fund expansion of a taxable business. Basically the VAT was recoverable because: The costs were incurred to fund the businesses expansion providing taxable supplies and as such the associated VAT was recoverable The costs were not incorporated into a component of the share price See Link below to the Case Rulings. THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS v HOTEL LA TOUR LTD [2023] UKUT 00178 (TCC) - GOV.UK (www.gov.uk) -Contains public sector information licensed under the Open Government Licence v3.0.