Intra-Community Supplies

Jun 21, 2023 | EU VAT

What are Intra-community Supplies

Intra-community supply and acquisition are the names given when goods are sold and transported from one EU country to another, where both seller and buyer are VAT registered in different EU countries. This triggers two transaction, an acquisition for the buyer, and supply for the seller. When reported this leaves the sale to be a zero-rated transaction. The transaction must be reported on the VAT return.

This type of transaction can only occur when the below two conditions are met:

·         the two VAT numbers used for the transaction are registered in different EU Member States, and these are both clearly displayed on the invoice

·         proof that the goods were transported to another EU country.

How to report

An EC Sales list must be submitted once the first intra-community supply is made, with the VAT number of the client being active on the VIES database. The reports are filed at different frequencies depending on which country the seller is based in. If no inter-community transactions are made, there is no need to report NIL on the EC sales list. When a company reaches a certain threshold (these differ between countries), Intrastat reports are required in place of the EC Sales List. This allows for more information to be reported on the sales.

The intra-community acquisition is also reported in the VAT return, where the VAT is declared and re-claimed all in one. This therefore leaves no VAT to be re-claimed by the buyer, which essentially shows as a zero-rated sale.

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