Distance selling for businesses

Distance selling occurs when a VAT-registered business in one European Union (EU) country supplies and delivers goods to a customer in another EU country who isn’t registered for VAT.

Customers who aren’t VAT registered might include:

  • private individuals
  • some small businesses
  • businesses that can’t register for VAT because their activities are exempt
  • public bodies
  • charities

Distance selling only involves goods, not services. And it only takes place when someone registered for VAT in one EU country sells and delivers goods to someone in another EU country who isn’t registered – and doesn’t have to be registered – for VAT.

Cross-border issues

In the context of business between Ireland and Northern Ireland, you should also be aware of the rules regarding distance selling in that each EU member state has its own distance selling thresholds and if you exceed these thresholds you are required to register for VAT in that member state and charge VAT accordingly.

Distance selling into Northern Ireland

If you’re a VAT-registered business outside the UK but in another European Union (EU) country and you sell and deliver goods to customers in the UK or the Isle of Man who aren’t VAT-registered – and don’t have to be registered – then you’re ‘distance selling’. For example, you might sell goods through the Internet or a through a mail order catalogue. Sales you make to customers who are VAT-registered don’t count as distance sales.

Businesses that distance sell into the UK have to register for UK VAT if the value of their distance sales is more than £70,000 [correct Jan 2016] in a year. If you distance sell excise goods like alcohol and tobacco then you’ll have to register for UK VAT and Excise Duty no matter how much your sales are worth.

The HMRC website provides information that  will help you understand what you have to do about VAT if you’re outside the UK and you make distance sales to UK customers. HMRC – Distance Selling in the UK

Distance selling into the Republic of Ireland

Where the value of distance sales to persons in this State by a supplier in another Member State exceeds or is likely to exceed €35,000 [correct Jan 2017] in a calendar year, that supplier must register for VAT in this State and must account for VAT at the appropriate Irish rates. If the threshold is not exceeded, the supplier may, nevertheless, opt to register and account for VAT in this State on his or her distance sales.

For further information please visit the Revenue website – Distance Sales in EU

See also:

Page last checked: September 2017

This webpage is for general information purposes only and while we endeavour to keep it up-to-date, errors may occur.  It is very important that you check with the relevant body to ensure the information is current and is applicable to your situation.

If you would like to suggest amendments or highlight new information that could be useful to others please don’t hesitate to get in touch.