Insights

VAT consequences of trading in goods in the EU

Ross Thompson · Posted on: December 9th 2025 · read

Following the UK’s departure from the EU, EU VAT rules ceased to have direct effect in most of the UK as of 1st January 2021, following the end of the transition period.

However, UK businesses must still be aware how EU VAT rules will affect them if they are trading in goods within the territory of the EU. This article serves as a useful reminder of some key points for consideration.

Importation of goods into the EU

Deliveries of goods by the supplier from the UK to customers in the EU are now exports from a UK perspective. These can be zero-rated from a UK perspective provided the supplier holds evidence that the goods were exported. However, when goods enter the territory of the EU, then someone must be named as the importer of record into the delivery country. This is determined by the agreed “Incoterms” for the sale.

Share this article

Related tags

Industries

Services

Incoterms are a set of internationally recognised rules which define the responsibilities of sellers and buyers. Under the DDP Incoterm, the supplier is responsible for the importation of goods into the EU. This means the supplier is not only responsible to bear the risks on importation and payment of any import VAT and customs duty, but in many cases must also register for VAT in that country and charge local VAT.

"Each EU member state has different rules and so this must be checked carefully before importing goods so that businesses can remain compliant with any VAT registration obligations and have steps in place to deal with the importation efficiently."

Ross Thompson, VAT and Indirect Tax Manager

Taking title to goods in the EU

An often-missed point is that if a UK business takes title to goods in the EU and sells them on, in many cases, this results in a VAT registration obligation within the EU. This applies even if the UK business does not take physical possession of the goods. If it is involved in a chain transaction in the EU, it takes title to goods and then sells them on within the EU, making a supply for VAT purposes.

The exact invoicing chain and movement of goods is crucial in order to determine the supplier’s VAT obligations within the EU and whether any simplification methods are available. Advice should always be taken in advance as in some cases irrecoverable VAT can be incurred.

Northern Ireland

Northern Ireland remains within the EU for the purposes of trading in goods for VAT purposes. This means that pre-Brexit rules still largely apply within Northern Ireland. Businesses should therefore check their obligations if they are acquiring goods in Northern Ireland from the EU or dispatching goods from Northern Ireland to the EU, to ensure that their reporting obligations are met.

Conclusion

"Our experienced team are here to support our clients through the web of uncertainty. As a member of Baker Tilly, we can provide advice and assist with any necessary VAT registrations and filings within the EU. Please contact us if you have any questions or concerns."

Ross Thompson, VAT and Indirect Tax Manager