Logistics

Your checklist

"Dispatching your goods" for EU markets

Dispatching your goods within the EU is relatively straightforward and legislation doesn't change often, but exporters must keep up-to-date with any changes. 

Most importantly you should know how to:

  • Handle VAT
  • When to report your sales figures for Intrastat statistics
  • If your goods are subject to licensing or other controls

Most goods can be dispatched to other member states of the EU without special customs documentation. There are some exceptions, for example where sales of goods are subject to excise duty or subject to an export licence, and also exports to special EU territories.

Goods in movement within the EU are termed as being “dispatched” when they leave the state of origin of the goods – the UK, and as “arrivals” when entering the EU member state acquiring them. 

The use of these terms distinguishes single market trade from international trade with third countries – that is, countries outside the EU, where the terms import and export apply. 

The EU principle of free circulation allows for goods produced in the EU to be moved around the EU without paying duty. 

More about Intrastat on the GOV.UK website

Export licences and special rules on the GOV.UK website

VAT for EU markets

Every business trading within the EU has to declare its sales on its VAT return (if you are VAT registered). If your sales of goods exceed the applicable exemption threshold during a calendar year, you must also submit Intrastat returns each month.

Find Intrastat thresholds on the HMRC UK trade website

The EU has standard rules on VAT but these rules may be applied differently in each EU country. You must normally pay VAT on all goods and services, up to and including the sale to the final consumer. This could also include each stage of a production process, e.g. buying components, assembly, or shipping.

Find out more about taxation on the EU Commission website

Standard rules on VAT on the EU Commission website

If you’re a VAT-registered business in the UK supplying goods and services to VAT-registered customers in another EU country, you must tell HMRC about those supplies. 

Read more about how VAT works on the GOV.UK website

How to report VAT on your EU sales on the GOV.UK website

VAT rules for sales of digital services from businesses to consumers

From 1 January 2015, the VAT rules for place of supply changed in the EU for sales of digital services from businesses to consumers. The change doesn’t affect business to business sales. For cross-border supplies of digital services there is no registration threshold and VAT is charged at the rate due in the consumer’s country.

If your sales are not being made as a business – for example, as a hobby activity with occasional sales rather than a commercial activity – the changes don’t apply to you and you don’t need to register for VAT or VAT MOSS (the VAT Mini One-Stop-Shop to report and pay VAT due on sales of digital services to consumers in the EU).

More about the VAT Mini One-Stop-Shop on the GOV.UK website

EU VAT rates on the EU Commission website

Top tips to get your VAT and paperwork right

Check whether you require a licence or need to adhere to special rules to export any restricted goods from the UK to other parts of the EU 

Complete a proforma sales invoice. Charge VAT if you’d do the same for customers in the UK.

Attach the proforma invoice (and licence, if you need one) to your consignment

You must keep records of proforma invoices and any official paperwork for 6 years in case of inspection

Register for VAT in the country you’re selling to within the EU if you’re distance selling to consumers rather than business and the total value of goods is over Euro 35,000

If you move goods anywhere within the EU worth over £250,000 in a calendar year, you need to make an Intrastat declaration, and you can only do this if you are registered for VAT in the UK

To pay the VAT due on sales you can either:

  • Register for VAT in each EU country where you supply digital services to consumers
  • Use the VAT MOSS scheme in one EU country

EU associated markets

The EU also has several trade agreements in place with countries that aren't EU members which you need to be aware of in terms of the movement of goods.

Turkey

While still an associate member of the EU, Turkey is in a customs union with the EU and therefore is a relatively free market for UK exports of goods and services. 

Goods from EU members receive preferential treatment if they are in free circulation within the EU (for example wholly made or customs duties paid). Turkey follows similar customs procedures to EU member states. 

Customs documents are required for exports to Turkey including a preferential statement on the movement certificates called an ATR Form.

Isle of Man and Channel Islands

The Isle of Man is in the EU, as part of its customs union and VAT agreement with the UK. The Channel Islands aren't in the fiscal territory of the European Community but are part of the customs territory. 

Export declarations for shipments to the Channel Islands aren't generally required for goods in free circulation within the EU, but traders must use sequentially numbered VAT invoices. For controlled goods, an export declaration using the National Export System is still required. It is recommended that traders supply a detailed commercial invoice. 

Iceland, Liechtenstein, Norway and Switzerland 

The European Free Trade Association's (EFTA) four member states are Iceland, Liechtenstein, Norway and Switzerland. 

Three European Free Trade Association (EFTA) states (Iceland, Liechtenstein and Norway) belong to the European Economic Area (EEA), uniting the 28 EU countries and the EFTA states in an internal market. The market enables goods and services to move freely in the EEA in an open and competitive environment. 

Switzerland has separate trade arrangements with the EU. All EFTA members now benefit from virtually the same privileged relationship among themselves as they do with the EU. For trading purposes, goods moved from EFTA countries to EU members states are treated similarly to goods moved between EU member states.

Excise goods in the EU

Excise is a tax that HMRC charges on beer, wine, spirits and other alcoholic drinks, hydrocarbon oils (including fuel and petrol), cigarettes and tobacco that are acquired, imported or produced in the UK.

There are schemes, such as excise duty drawback, to suspend duty on excise goods moving within European Union (EU) member states. To claim, you must be running a business and you must supply the original duty payment document and may need to show an audit trail between the goods and duty paid. 

Additional information is necessary if you are not the business that originally paid the duty. See HMRC notice 207 about excise drawback eligibility.

Consignments must be accompanied by the correct documentation (excise movement certificate) and financial security – a guarantee given by an approved guarantor who undertakes to pay money to HMRC in the event of an irregularity covered by the guarantee or bond. 

You must use HMRC's electronic Excise Movement and Control System (ECMS) to provide an electronic Administrative Accompanying Document (e-AAD) for duty-paid goods moving within the UK and EU.

Get the right support and advice

Have an initial discussion on your logistics options with your Scottish Enterprise/SDI account manager (if you have one) or an export adviser.

Contact us

Got any questions about EU opportunities or expanding in new markets? Our export advisers are here to help.

Disclaimer

All information provided on this web page is for general guidance only. The contents of this guide have been provided by our training partners, Upper Quartile. Upper Quartile is not affiliated with any of the third parties or listings represented on our website. Third party listings are drawn from public domain and industry body data sources. Due diligence on a given third party or listing remains the exclusive responsibility of the end user. Whilst every effort is made to ensure the accuracy of the details represented, Upper Quartile and Scottish Enterprise cannot endorse, recommend or accept responsibility for any transactions conducted between the user and a given third party or listing provided on this web page.