Does a UK Company Charge VAT to EU Customers?

Not always.

A UK company does not automatically charge UK VAT to every customer located in the European Union.

The correct VAT treatment depends on several factors, including:

• whether you are selling goods or services;
• whether the goods are sent from Great Britain or Northern Ireland;
• whether the customer is a business or consumer;
• where the customer belongs;
• where the goods are physically located;
• the applicable place-of-supply rules; and
• whether you have VAT obligations in an EU country.

Since the UK left the EU VAT system for most purposes, sales from Great Britain to EU customers are generally treated as international transactions.

However, special VAT rules continue to apply to certain movements of goods between Northern Ireland and the EU.

This guide explains when a UK company may charge VAT to EU customers and when UK VAT may not apply.

Does a UK Company Charge VAT When Selling Goods to the EU?

If goods are exported from Great Britain — England, Scotland or Wales — to an EU country, the sale can generally be zero-rated for UK VAT where the relevant export conditions are satisfied.

For example:

UK company in England

↓

Sells goods to customer in France

↓

Goods leave Great Britain and are delivered to France

↓

Qualifying export may be zero-rated for UK VAT

The customer may then have import VAT, customs or other tax obligations when the goods enter the EU.

Zero-rating does not mean the sale is VAT exempt.

It means VAT applies at 0%.

Example: Selling Goods From the UK to Germany

Imagine a VAT-registered UK company sells equipment to a German customer.

The goods are shipped:

Manchester → Germany

The invoice might show:

Equipment: £5,000

UK VAT at 0%: £0

Invoice total: £5,000

If the export satisfies HMRC's requirements and appropriate evidence is retained, the company may be able to zero-rate the transaction.

The German customer may then have to deal with German import VAT and potentially customs procedures.

Do I Need Evidence That the Goods Left the UK?

Yes.

A foreign customer address alone is not enough to support zero-rating.

The company should retain appropriate evidence showing that the goods were genuinely exported.

Depending on the transaction, evidence may include:

• courier documents;
• freight documents;
• customs declarations;
• shipping records;
• delivery documentation;
• export documentation; and
• other commercial evidence.

If the company cannot prove that the goods were exported in accordance with the applicable rules, HMRC may require UK VAT to be accounted for.

Is Selling to the EU Still an Export?

For goods leaving Great Britain, yes.

Goods shipped from England, Scotland or Wales to EU countries are generally exports for UK VAT purposes.

For example:

England → Italy = Export

Scotland → Spain = Export

Wales → France = Export

Northern Ireland has different rules for certain goods transactions with the EU.

What Happens to VAT When the Goods Enter the EU?

Although the UK seller may zero-rate the export, this does not mean the goods enter the EU without tax.

There may be:

• import VAT;
• customs duty;
• customs clearance fees; and
• other import charges.

Who is responsible depends partly on the agreed shipping terms and the way the transaction is structured.

This should be considered when agreeing prices and delivery terms with EU customers.

What Is DDP and Why Does It Matter?

Some UK businesses sell goods to EU customers using Delivered Duty Paid (DDP) arrangements.

Broadly, this can mean the seller takes responsibility for import procedures, duties and taxes in the customer's country.

If a UK company takes responsibility for importing goods into an EU member state, the company may potentially create VAT registration or reporting obligations in that country.

Businesses offering DDP throughout the EU should therefore obtain appropriate VAT and customs advice.

What About DAP Deliveries?

Under certain delivery arrangements, such as Delivered at Place, the customer may be responsible for import VAT and customs charges when the goods arrive.

For example:

UK seller exports goods at 0% UK VAT

↓

Goods arrive in France

↓

French customer handles import VAT

This can be simpler for the UK seller but potentially less convenient for consumers.

The commercial impact should be considered carefully.

Does a UK Company Charge VAT on Services to an EU Business?

For many services supplied business-to-business (B2B), the general VAT rule is that the place of supply is where the business customer belongs. HMRC confirms this general B2B principle.

For example:

UK consultancy → VAT-registered French business

If the general B2B place-of-supply rule applies:

Place of supply → France

The UK company would generally not charge UK VAT.

The customer may instead account for VAT in France, often using the applicable reverse-charge mechanism.

Example: UK Company Providing Consulting to Germany

Suppose a UK VAT-registered company provides consulting services to a German company.

The service costs:

£3,000

If the general B2B place-of-supply rule applies, the transaction could be treated as:

Consulting fee: £3,000

UK VAT: £0

Total: £3,000

The German customer may then account for German VAT under the reverse-charge mechanism where required.

What Is the Reverse Charge?

The reverse charge shifts responsibility for accounting for VAT from the supplier to the business customer.

A simplified transaction might look like:

UK company provides service

↓

No UK VAT charged

↓

EU business customer accounts for local VAT

This is commonly relevant to cross-border B2B services.

However, the precise rules depend on the type of service and the customer's country.

Should I Ask for the EU Customer's VAT Number?

For B2B transactions, obtaining the customer's EU VAT number can help establish that the customer is acting as a business.

You should consider retaining evidence such as:

• VAT registration number;
• company registration information;
• business website;
• commercial contract;
• tax registration details; or
• other evidence demonstrating business status.

A foreign company name alone may not always provide sufficient evidence.

Do I Need to Check the EU VAT Number?

It is good practice to verify an EU VAT number where it is relevant to the VAT treatment.

Keep evidence of the verification with the customer records.

This can help demonstrate why the transaction was treated as B2B.

Does a UK Company Charge VAT on Services to EU Consumers?

Potentially.

The VAT treatment of business-to-consumer (B2C) services differs from the general B2B rule.

For many B2C services, the general rule is that the place of supply is where the supplier belongs.

For a UK supplier, this could mean UK VAT remains applicable.

However, there are many important exceptions.

The correct answer depends on the exact service supplied.

Which Services Have Special VAT Rules?

Special place-of-supply rules can apply to services involving areas such as:

• property;
• events;
• entertainment;
• telecommunications;
• broadcasting;
• electronic services;
• transport;
• vehicle hire;
• intermediary services; and
• other specialised services.

Businesses should therefore identify the exact service before determining whether UK VAT applies.

What About Digital Services Sold to EU Consumers?

Digital services can have specific VAT rules because the place of taxation may follow the location of the consumer.

This can include certain:

• software downloads;
• digital subscriptions;
• apps;
• streaming services;
• online content; and
• electronically supplied services.

A UK company selling digital services to EU consumers may therefore potentially need to account for VAT in the EU.

This can create EU VAT registration or scheme requirements.

Do I Need to Register for VAT in an EU Country?

Possibly.

A UK business may create an EU VAT registration obligation depending on what it sells and how it operates.

Potential triggers can include:

• storing inventory in an EU country;
• importing goods into an EU country in the company's own name;
• making local domestic sales;
• selling certain services to EU consumers;
• operating warehouses or fulfilment centres; or
• other taxable activities within the EU.

UK VAT registration does not automatically cover your VAT obligations throughout Europe.

What If I Store Stock in the EU?

This is particularly important for ecommerce businesses.

Suppose a UK company stores inventory in a fulfilment centre in Germany.

The company then sells a product:

German warehouse → German consumer

The goods are already physically located in Germany.

This is not simply a UK export.

The transaction may instead create German VAT obligations.

Similarly, moving inventory between EU countries can create additional reporting and VAT requirements.

Does Amazon FBA Create EU VAT Obligations?

Potentially.

If Amazon or another fulfilment provider stores your company's stock in an EU country, your company may potentially need a VAT registration there.

Using Amazon does not automatically transfer all VAT responsibility to Amazon.

The actual position depends on:

• where stock is stored;
• customer location;
• marketplace rules;
• movement of inventory; and
• the structure of the transaction.

Ecommerce sellers should monitor stock locations carefully.

What About Shopify Sales to EU Customers?

Shopify can help calculate taxes, but it does not decide your company's legal VAT obligations.

You still need to determine:

Where is the stock?

Where is the customer?

Who imports the goods?

Is the customer B2B or B2C?

Does UK VAT apply?

Does EU VAT apply?

Shopify should then be configured to reflect the correct VAT treatment.

What Is the EU Import One Stop Shop?

The EU operates an Import One Stop Shop (IOSS) system for certain qualifying low-value goods sold to EU consumers.

Where applicable, the scheme can allow VAT to be collected at the point of sale rather than the customer being charged import VAT when the package arrives.

Eligibility and conditions apply.

A UK ecommerce business making significant B2C sales into the EU should consider whether IOSS is relevant to its business model.

Does IOSS Mean I Charge UK VAT?

No.

IOSS concerns EU VAT.

A UK seller using IOSS may collect the VAT applicable in the customer's EU country.

For example:

UK company → Italian consumer

The company may potentially collect Italian VAT, not UK VAT, where the relevant IOSS rules apply.

The distinction is important.

What About Goods Worth More Than the IOSS Limit?

Different import VAT and customs procedures generally apply to consignments outside the scope of IOSS.

The customer or seller may need to deal with import VAT through the relevant customs procedure.

Businesses should therefore understand how the value of consignments affects their EU sales process.

Does a UK Company Charge VAT to an EU Business Buying Goods?

For goods exported from Great Britain to an EU business, the sale may generally be zero-rated as an export where the appropriate export conditions are met.

For example:

UK seller → Spanish VAT-registered business

Goods physically move England → Spain

The UK sale can potentially be zero-rated.

The Spanish company may then account for import VAT in Spain.

Does the EU Customer's VAT Number Make an Export Zero-Rated?

For goods exported from Great Britain, the physical export of the goods and appropriate export evidence are critical.

The customer's EU VAT number may be useful, particularly for B2B transactions, but the transaction does not become a qualifying export simply because the customer provides a VAT number.

The goods must genuinely leave the UK under the applicable export conditions.

What About Northern Ireland and EU Customers?

Northern Ireland has special VAT arrangements for goods traded with the EU under the Windsor Framework. HMRC maintains separate rules for these supplies.

Goods moving:

Northern Ireland → EU

are generally treated differently from goods moving:

Great Britain → EU

For example, HMRC confirms that qualifying supplies of goods from Northern Ireland to EU VAT-registered customers can be zero-rated when specified conditions are satisfied.

Businesses trading in goods between Northern Ireland and EU member states may also need to use an XI VAT number and comply with specific reporting requirements.

What Is an XI VAT Number?

An XI VAT number is used for certain Northern Ireland transactions involving goods and the EU.

It generally consists of:

XI + UK VAT registration number

Businesses may need to use it on relevant documentation when trading goods between Northern Ireland and the EU.

This does not normally apply in the same way to ordinary services supplied from Great Britain.

Can Northern Ireland Businesses Use OSS?

Yes, in certain circumstances.

HMRC confirms that eligible businesses can use the One Stop Shop (OSS) Union scheme to report VAT on qualifying distance sales of goods from Northern Ireland to EU consumers.

This is another important difference between Northern Ireland and Great Britain.

Does Brexit Mean There Is Never UK VAT on EU Sales?

No.

Brexit changed the VAT relationship between the UK and EU, but it did not create a simple rule saying:

EU customer = no UK VAT

The correct treatment continues to depend on the transaction.

For example:

Goods exported from Great Britain → potentially zero-rated

General B2B service → potentially outside UK VAT

Certain B2C services → UK VAT may still apply

Digital service to EU consumer → EU VAT rules may apply

Goods stored in EU → local EU VAT may apply

Each transaction needs to be classified properly.

Do EU Sales Count Towards My UK VAT Turnover?

Potentially.

Qualifying zero-rated exports remain taxable supplies.

Therefore, zero-rated sales can still be relevant when determining the company's VAT-taxable turnover.

Services whose place of supply is outside the UK may receive different treatment.

Do not automatically exclude every EU sale when calculating your VAT registration position.

What Should My Invoice Say?

The correct invoice depends on why UK VAT is not charged.

Possible treatments might include:

Export — zero-rated

Outside the scope of UK VAT

Reverse charge

or another appropriate VAT treatment.

These do not mean the same thing.

Your accounting records should identify the correct reason rather than simply recording:

“No VAT.”

Should I Charge VAT in Pounds or Euros?

VAT rules do not generally require every invoice to be issued in pounds sterling.

A UK business may invoice customers in euros or another currency.

However, VAT accounting can require appropriate sterling conversions for VAT reporting purposes.

HMRC rules should be followed when converting foreign-currency transactions.

What Records Should I Keep for EU Sales?

Consider maintaining:

• customer invoices;
• customer VAT numbers;
• VAT-number verification;
• contracts;
• shipping documents;
• customs records;
• export evidence;
• courier documentation;
• customer location information;
• proof of business status;
• marketplace reports; and
• foreign VAT records.

The records should explain why the VAT treatment was applied.

Common VAT Mistakes When Selling to the EU

Common errors include:

• assuming every EU sale is VAT-free;
• charging UK VAT automatically;
• failing to distinguish goods and services;
• confusing B2B and B2C rules;
• zero-rating goods without export evidence;
• ignoring EU import VAT;
• failing to consider IOSS;
• storing inventory in the EU without checking local VAT registration;
• treating zero-rated exports as exempt;
• ignoring special Northern Ireland rules;
• failing to validate B2B customer information;
• relying entirely on Shopify or Amazon tax settings; and
• failing to consider VAT obligations in the customer's country.

International VAT can involve both UK and EU tax rules, so mistakes can become expensive.

Frequently Asked Questions

Does a UK company charge VAT to EU customers?

Sometimes. The treatment depends on whether you sell goods or services, whether the customer is a business or consumer, and where the transaction takes place.

Do I charge VAT on goods shipped from the UK to the EU?

Qualifying goods exported from Great Britain to an EU destination can generally be zero-rated for UK VAT where the relevant conditions are satisfied.

Do I charge VAT to an EU VAT-registered business?

For many B2B services, UK VAT is not charged where the place of supply is the EU customer's country. For exported goods, zero-rating may apply where export requirements are satisfied.

Do I charge VAT to EU consumers?

It depends. Exported goods, digital services and other B2C services can each have different VAT rules.

Do I need the customer's EU VAT number?

For B2B transactions it can be important evidence of the customer's business status and may be required in certain VAT arrangements.

Do I charge UK VAT when selling to Germany?

Potentially not, depending on the transaction. Goods exported from Great Britain can potentially be zero-rated, while many B2B services may have their place of supply in Germany.

Does Brexit mean EU sales are exports?

Goods leaving Great Britain for EU countries are generally treated as exports. Different rules apply to certain Northern Ireland–EU goods transactions.

Can I need an EU VAT number as well as a UK VAT number?

Yes. Certain activities, such as storing stock or making local taxable supplies in an EU country, may create an EU VAT registration requirement.

Does Shopify handle EU VAT automatically?

Shopify can calculate taxes based on your configuration, but the company remains responsible for determining the correct VAT treatment.

Can a UK company use IOSS?

Potentially, for qualifying distance sales of imported goods to EU consumers, subject to the scheme's eligibility and procedural requirements.

Final Thoughts

So, does a UK company charge VAT to EU customers?

Sometimes — but there is no single rule covering every EU sale.

For goods sold from Great Britain:

Goods exported to EU → potentially 0% UK VAT

For many B2B services:

UK company → EU business → place of supply in EU → generally no UK VAT

For B2C services:

Treatment depends on the type of service

For ecommerce:

Stock location + customer location + import arrangements + marketplace rules all matter

And for Northern Ireland:

Special EU VAT rules continue to apply to goods.

A useful process is:

Goods or services?

↓

Great Britain or Northern Ireland?

↓

B2B or B2C?

↓

Where is the supply treated as taking place?

↓

Does UK VAT apply?

↓

Could EU VAT registration or reporting be required?

Do not use a blanket “EU customer = 0% VAT” rule.

Determine the correct treatment for each type of transaction and retain the evidence supporting it.

This article provides general information only and does not constitute tax, accounting, financial or legal advice. UK and EU VAT rules can change and the treatment depends on the specific transaction. Check current HMRC guidance and, where necessary, the VAT rules in the relevant EU country.

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