Section 14.
1 The Value Added Tax Act 1983 shall be amended in accordance with the following provisions of this Part of this Schedule.
2 In section 1 (charge to tax), for the words from “and on” onwards there shall be substituted “on the acquisition in the United Kingdom from other member States of any goods and on the importation of goods from places outside the member States.”
3 (1) After section 2 (scope of tax) there shall be inserted the following sections—
(1) Tax shall be charged on any acquisition from another member State of any goods where—
(a) the acquisition is a taxable acquisition and takes place in the United Kingdom;
(b) the acquisition is otherwise than in pursuance of a taxable supply; and
(c) the person who makes the acquisition is a taxable person or the goods are subject to a duty of excise or consist in a new means of transport.
(2) An acquisition of goods from another member State is a taxable acquisition if—
(a) it falls within subsection (3) below or the goods consist in a new means of transport; and
(b) it is not an exempt acquisition.
(3) An acquisition of goods from another member State falls within this subsection if—
(a) the goods are acquired in the course or furtherance of—
(i) any business carried on by any person; or
(ii) any activities carried on otherwise than by way of business by any body corporate or by any club, association, organisation or other unincorporated body;
(b) it is the person who carries on that business or, as the case may be, those activities who acquires the goods; and
(c) the supplier—
(i) is taxable in another member State at the time of the transaction in pursuance of which the goods are acquired; and
(ii) in participating in that transaction, acts in the course or furtherance of a business carried on by him.
(4) Tax on any acquisition of goods from another member State is a liability of the person who acquires the goods and (subject to provisions about accounting and payment) becomes due at the time of acquisition.
(1) Tax on the importation of goods from places outside the member States shall be charged and payable as if it were a duty of customs.
(2) For the purposes of this Act goods are imported from a place outside the member States where—
(a) having been removed from a place outside the member States, they enter the territory of the Community;
(b) they enter that territory by being removed to the United Kingdom or are removed to the United Kingdom after entering that territory; and
(c) the circumstances are such that it is on their removal to the United Kingdom or subsequently while they are in the United Kingdom that any Community customs debt in respect of duty on their entry into the territory of the Community would be incurred.
(3) Accordingly—
(a) goods shall not be treated for the purposes of this Act as imported at any time before a Community customs debt in respect of duty on their entry into the territory of the Community would be incurred; and
(b) the person who is to be treated for the purposes of this Act as importing any goods from a place outside the member States is the person who would be liable to discharge any such Community customs debt.
(4) The preceding provisions of this section shall not apply, except in so far as the context otherwise requires or provision to the contrary is contained in regulations under subsection (1) of section 24 below, for construing any references to importation or to an importer in any enactment or subordinate legislation applied for the purposes of this Act by that subsection.
(1) A person is a taxable person for the purposes of this Act while he is, or is required to be, registered under this Act.
(2) Schedules 1 to 1B to this Act shall have effect with respect to registration.
(3) Persons registered under any of those Schedules shall be registered in a single register kept by the Commissioners for the purposes of this Act; and, accordingly, references in this Act to being registered under this Act are references to being registered under any of those Schedules.
(4) The Commissioners may by regulations make provision as to the inclusion and correction of information in that register with respect to the Schedule under which any person is registered.”
4 (1) In subsection (3) of section 3 (power to provide for how transactions are to be treated for the purposes of the charge on supplies), at the end there shall be inserted “and may provide that paragraph 5A of that Schedule shall not apply, in such circumstances as may be described in the order, so as to make a removal of assets a supply of goods under that paragraph.”
(2) In subsection (5) of that section (treatment of goods as supplied to and from the same person in the course or furtherance of his business), for “acquired” there shall be substituted “taken possession of”.
5 In section 4(1) (time of supply), after “apply” there shall be inserted “(subject to section 35 below)”.
6 (1) After subsection (3) of section 5 (further provisions as to time of supply), there shall be inserted the following subsections—
“(3A) Where any supply of goods involves both—
(a) the removal of the goods from the United Kingdom; and
(b) their acquisition in another member State by a person who is liable for value added tax on the acquisition in accordance with provisions of the law of that member State corresponding, in relation to that member State, to the provisions of section 2A above,
section 4(2) above and subsections (1) to (3) and (5) to (7) of this section shall not apply and the supply shall be treated for the purposes of this Act as taking place on whichever is the earlier of the days specified in subsection (3B) below.
(3B) The days mentioned in subsection (3A) above are—
(a) the fifteenth day of the month following that in which the removal in question takes place; and
(b) the day of the issue, in respect of the supply, of a tax invoice or of an invoice of such other description as the Commissioners may by regulations prescribe.”
(2) In subsection (9) of that section—
(a) for “(3)” there shall be substituted “(3B)”; and
(b) in the words after paragraph (b), after “there is” there shall be inserted “a supply of goods to a person who has given such an undertaking as is mentioned in section 32B(4)(b) below or there is”.
(3) In subsection (10) of that section (meaning of “tax invoice”), for “taxable person” there shall be substituted “person to whom such an invoice should be issued.”
7 (1) In subsection (1) of section 6 (place of supply), after “apply” there shall be inserted “(subject to section 35 below)”.
(2) At the beginning of subsection (2) of that section there shall be inserted “Subject to the following provisions of this section”.
(3) For subsection (3) of that section (goods removed from or to the United Kingdom) there shall be substituted the following subsections—
“(2A) Goods shall be treated—
(a) as supplied in the United Kingdom where their supply involves their installation or assembly at a place in the United Kingdom to which they are removed; and
(b) as supplied outside the United Kingdom where their supply involves their installation or assembly at a place outside the United Kingdom to which they are removed.
(2B) Goods whose place of supply is not determined under any of the preceding provisions of this section shall be treated as supplied in the United Kingdom where—
(a) the supply involves the removal of the goods to the United Kingdom by or under the directions of the person who supplies them;
(b) the supply is a transaction in pursuance of which the goods are acquired in the United Kingdom from another member State by a person who is not a taxable person;
(c) the supplier—
(i) is liable to be registered under Schedule 1A to this Act; or
(ii) would be so liable if he were not already registered under this Act or liable to be registered under Schedule 1 to this Act;
and
(d) the supply is neither a supply of goods consisting in a new means of transport nor anything which is treated as a supply for the purposes of this Act by virtue only of paragraph 5(1) or 5A of Schedule 2 to this Act.
(2C) Goods whose place of supply is not determined under any of the preceding provisions of this section and which do not consist in a new means of transport shall be treated as supplied outside the United Kingdom where—
(a) the supply involves the removal of the goods, by or under the directions of the person who supplies them, to another member State;
(b) the person who makes the supply is taxable in another member State; and
(c) provisions of the law of that member State corresponding, in relation to that member State, to the provisions made by subsection (2B) above make that person liable to value added tax on the supply;
but this subsection shall not apply in relation to any supply in a case where the liability mentioned in paragraph (c) above depends on the exercise by any person of an option in the United Kingdom corresponding to such an option as is mentioned in paragraph 1(2) of Schedule 1A to this Act, unless that person has given, and has not withdrawn, a notification to the Commissioners that he wishes his supplies to be treated as taking place outside the United Kingdom where they are supplies in relation to which the other requirements of this subsection are satisfied.
(2D) Goods whose place of supply is not determined under any of the preceding provisions of this section shall be treated as supplied in the United Kingdom where—
(a) their supply involves their being imported from a place outside the member States; and
(b) the person who supplies them is the person by whom, or under whose directions, they are so imported.
(3) Goods whose place of supply is not determined under any of the preceding provisions of this section but whose supply involves their removal to or from the United Kingdom shall be treated—
(a) as supplied in the United Kingdom where their supply involves their removal from the United Kingdom without also involving their previous removal to the United Kingdom; and
(b) as supplied outside the United Kingdom in any other case.”
(4) In subsection (4) of that section (goods removed from the United Kingdom in the course of their removal from one part of the United Kingdom to another), for “subsections (2) and (3) above” there shall be substituted “the preceding provisions of this section”.
(5) After subsection (4) of that section there shall be inserted the following subsection—
“(4A) The Commissioners may by regulations provide that a notification for the purposes of subsection (2C) above is not to be given or withdrawn except in such circumstances, and in such form and manner, as may be prescribed.”
(6) In subsection (6) of that section (power to vary rules of place of supply of services), for the word “services”, in each place where it occurs, there shall be substituted “goods or services”.
8 After subsection (5) of section 7 (reverse charge on services received from abroad) there shall be inserted the following subsection—
“(6) The power of the Treasury by order to add to or vary Schedule 3 to this Act shall include power, where any services whose place of supply is determined by an order under section 6(6) above are added to that Schedule, to provide that subsection (1) above shall have effect in relation to those services as if a person belongs in the United Kingdom for the purposes of paragraph (b) of that subsection if, and only if, he is a taxable person.”
9 In section 8(1) (place where supplier or recipient belongs), after the word “apply”, in the second place where it occurs, there shall be inserted “(subject to any provision made under section 7(6) above)”.
10 After section 8 there shall be inserted the following sections—
(1) Subject to the following provisions of this section, references in this Act to the acquisition of goods from another member State shall be construed as references to any acquisition of goods in pursuance of a transaction in relation to which the following conditions are satisfied, that is to say—
(a) the transaction is a supply of goods (including anything treated for the purposes of this Act as a supply of goods); and
(b) the transaction involves the removal of the goods from another member State;
and references in this Act, in relation to such an acquisition, to the supplier shall be construed accordingly.
(2) It shall be immaterial for the purposes of subsection (1) above whether the removal of the goods from the other member State is by or under the directions of the supplier or by or under the directions of the person who acquires them or any other person.
(3) Where the person with the property in any goods does not change in consequence of anything which is treated for the purposes of this Act as a supply of goods, that supply shall be treated for the purposes of this Act as a transaction in pursuance of which there is an acquisition of goods by the person making it.
(4) The Treasury may by order provide with respect to any description of transaction that the acquisition of goods in pursuance of a transaction of that description is not to be treated for the purposes of this Act as the acquisition of goods from another member State.
(1) Subject to section 35 below and any regulations under subsection (3) below, where goods are acquired from another member State, the acquisition shall be treated for the purposes of this Act as taking place on whichever is the earlier of—
(a) the fifteenth day of the month following that in which the event occurs which, in relation to that acquisition, is the first relevant event for the purposes of taxing the acquisition; and
(b) the day of the issue, in respect of the transaction in pursuance of which the goods are acquired, of an invoice of such a description as the Commissioners may by regulations prescribe.
(2) For the purposes of this Act the event which, in relation to any acquisition of goods from another member State, is the first relevant event for the purposes of taxing the acquisition is the first removal of the goods which is involved in the transaction in pursuance of which they are acquired.
(3) The Commissioners may by regulations make provision with respect to the time at which an acquisition is to be treated as taking place in prescribed cases where the whole or part of any consideration comprised in the transaction in pursuance of which the goods are acquired is determined or payable periodically, or from time to time, or at the end of a period; and any such regulations may provide, in relation to any case to which they apply, for goods to be treated as separately and successively acquired at prescribed times or intervals.
(1) This section shall apply (subject to sections 32B(5) and 35 below) for determining for the purposes of this Act whether goods acquired from another member State are acquired in the United Kingdom.
(2) The goods shall be treated as acquired in the United Kingdom if they are acquired in pursuance of a transaction which involves their removal to the United Kingdom and does not involve their removal from the United Kingdom, and (subject to the following provisions of this section) shall otherwise be treated as acquired outside the United Kingdom.
(3) Subject to subsection (4) below, the goods shall be treated as acquired in the United Kingdom if they are acquired by a person who, for the purposes of their acquisition, makes use of a number assigned to him for the purposes of value added tax in the United Kingdom.
(4) Subsection (3) above shall not require any goods to be treated as acquired in the United Kingdom where it is established, in accordance with regulations made by the Commissioners for the purposes of this section—
(a) that value added tax has been paid in another member State on the acquisition of those goods; and
(b) that that tax fell to be paid by virtue of provisions of the law of that member State corresponding, in relation to that member State, to the provision made by subsection (2) above.
(5) The Commissioners may by regulations make provision for the purposes of this section—
(a) for the circumstances in which a person is to be treated as having been assigned a number for the purposes of value added tax in the United Kingdom;
(b) for the circumstances in which a person is to be treated as having made use of such a number for the purposes of the acquisition of any goods; and
(c) for the refund, in prescribed circumstances, of tax paid in the United Kingdom on acquisitions of goods in relation to which the conditions specified in subsection (4)(a) and (b) above are satisfied.”
11 In section 9(1) (rate of tax)—
(a) after paragraph (a) there shall be inserted the following paragraph—
“(aa) on the acquisition of goods from another member State, by reference to the value of the acquisition as determined under this Act; and”; and
(b) in paragraph (b), after the word “goods”, in the first place where it occurs, there shall be inserted “from a place outside the member States”.
12 (1) In subsection (1) of section 10 (value of supply of goods or services), for “shall be determined as follows” there shall be substituted “shall, except as otherwise provided by or under this Act, be determined in accordance with this section and Schedule 4 to this Act, and for those purposes subsections (2) to (4) below have effect subject to that Schedule”.
(2) For subsection (3) of that section (value where supply for no consideration or for consideration not or not wholly in money) there shall be substituted the following subsection—
“(3) If the supply is for a consideration not consisting or not wholly consisting of money, its value shall be taken to be such amount in money as, with the addition of the tax chargeable, is equivalent to the consideration.”
13 After section 10 there shall be inserted the following section—
(1) For the purposes of this Act the value of any acquisition of goods from another member State shall be taken to be the value of the transaction in pursuance of which they are acquired.
(2) Where goods are acquired from another member State otherwise than in pursuance of a taxable supply, the value of the transaction in pursuance of which they are acquired shall be determined for the purposes of subsection (1) above in accordance with this section and Schedule 4A to this Act, and for those purposes—
(a) subsections (3) to (5) below have effect subject to Schedule 4A to this Act; and
(b) section 10 above and Schedule 4 to this Act shall not apply in relation to the transaction.
(3) If the transaction is for a consideration in money, its value shall be taken to be such amount as is equal to the consideration.
(4) If the transaction is for a consideration not consisting or not wholly consisting of money, its value shall be taken to be such amount in money as is equivalent to the consideration.
(5) Where a transaction in pursuance of which goods are acquired from another member State is not the only matter to which a consideration in money relates, the transaction shall be deemed to be for such part of the consideration as is properly attributable to it.”
14 (1) In subsection (1) of section 11 (value of imported goods), for the words from “imported goods” onwards there shall be substituted “goods imported from a place outside the member States shall (subject to subsections (2) and (2A) below) be determined according to the rules applicable in the case of Community customs duties, whether or not the goods in question are subject to any such duties.”
(2) In subsection (2) of that section, for the words before paragraph (a) there shall be substituted “For the purposes of this Act the value of any goods imported from a place outside the member States shall be taken to include the following so far as they are not already included in that value in accordance with the rules mentioned in subsection (1) above, that is to say-”.
(3) After subsection (2) of that section there shall be inserted the following subsection—
“(2A) Subject to subsection (2) above, where—
(a) goods are imported from a place outside the member States for a consideration which is or includes a price in money payable as on the transfer of property;
(b) the terms on which those goods are so imported allow a discount for prompt payment of that price;
(c) those terms do not include provision for payment of that price by instalments; and
(d) payment of that price is made in accordance with those terms so that the discount falls to be allowed,
the value of the goods shall be taken for the purposes of this Act to be reduced by the amount of the discount.”
15 (1) In subsection (1) of section 14 (credit for input tax against output tax), after “him” there shall be inserted “and in respect of the acquisition by him from other member States of any goods”.
(2) In subsection (3) of that section (meaning of “input tax” and “output tax”)—
(a) after paragraph (a) there shall be inserted the following paragraph—
“(aa) tax on the acquisition by him from another member State of any goods; and”;
(b) in paragraph (b), after “goods” there shall be inserted “from a place outside the member States”;
(c) for “either” there shall be substituted “each”; and
(d) at the end there shall be inserted “or on the acquisition by him from another member State of goods (including tax which is also to be counted as input tax by virtue of paragraph (aa) above).”
(3) In subsection (3A) of that section (goods used by company for domestic purposes of a director etc.), for the words “supplied to, or imported by, a company” there shall be substituted “are supplied to a company, goods are acquired by a company from another member State or goods are imported by a company from a place outside the member States and the goods or services which are so supplied, acquired or imported”.
(4) In subsection (4) of that section (apportionment of tax to input tax)—
(a) for “or goods imported by him” there shall be substituted “goods acquired by a taxable person from another member State or goods imported by a taxable person from a place outside the member States”; and
(b) after “supplies” there shall be inserted “acquisitions”.
(5) In subsection (9) of that section (regulations as to credits for input tax)—
(a) in paragraph (a), for “or paid or payable by him on the importation of goods” there shall be substituted “tax on the acquisition of goods by a taxable person from other member States and tax paid or payable by a taxable person on the importation of goods from places outside the member States”;
(b) in paragraph (b)—
(i) for “or paid by him on the importation of goods” there shall be substituted “or on the acquisition of goods by him from another member State or paid by him on the importation of goods from places outside the member States”; and
(ii) after the word “supply”, in the second place where it occurs, there shall be inserted “acquisition”;
and
(c) in paragraph (c), for “or importation of goods acquired for it before its incorporation” there shall be substituted “acquisition or importation of goods before the company’s incorporation for appropriation to the company or its business”.
(6) In subsection (10) of that section (exclusions by Treasury order)—
(a) after “supplies” there shall be inserted “acquisitions”;
(b) in paragraph (a), after the word “goods”, in the second place where it occurs, there shall be inserted “acquired or”; and
(c) after the word “supplied”, in the second and fourth places where it occurs in that paragraph, there shall be inserted “acquired”.
16 (1) In subsection (1) of section 15 (input tax allowable as a credit), after the word “supplies”, in the first place where it occurs, there shall be inserted “acquisitions”.
(2) In subsection (2) of that section, after paragraph (b) there shall be inserted the following paragraph—
“(ba) such other supplies outside the United Kingdom and such exempt supplies as the Treasury may by order specify for the purposes of this subsection.”
17 (1) In subsection (3) of section 16 (no tax on zero-rated imports)—
(a) for “imported into the United Kingdom” there shall be substituted “acquired in the United Kingdom from another member State or imported from a place outside the member States”; and
(b) after “their” there shall be inserted “acquisition or”.
(2) In subsection (6)(a) of that section (zero-rating of exports and goods shipped as stores etc.), after “exported them” there shall be inserted “to a place outside the member States”.
(3) In subsection (7) of that section (regulations as to zero-rating of goods which have been or are to be exported), for the words from “where” to “and” there shall be substituted “where—
(a) the Commissioners are satisfied that the goods have been or are to be exported to a place outside the member States or that the supply in question involves both—
(i) the removal of the goods from the United Kingdom; and
(ii) their acquisition in another member State by a person who is liable for value added tax on the acquisition in accordance with provisions of the law of that member State corresponding, in relation to that member State, to the provisions of section 2A above;
and
(b)”.
(4) In subsection (8) of that section (zero-rating of services where goods let on hire and exported), for “exported” there shall be substituted “removed from the United Kingdom”.
(5) In subsection (9) of that section (cases where goods are not exported or shipped), in paragraph (a), after “shipped” there shall be inserted “or otherwise removed from the United Kingdom”.
18 In section 17(1) (exemptions), at the end there shall be inserted “and an acquisition of goods from another member State is an exempt acquisition if the goods are acquired in pursuance of an exempt supply.”
19 (1) In section 18 (relief on supply of second-hand goods), in each of paragraphs (a) and (b) of subsection (3), for “importation of goods of that description” there shall be substituted “acquisition of goods of that description from another member State or the importation of goods of that description from a place outside the member States”.
(2) In subsection (4) of that section—
(a) after the word “the”, in the second place where it occurs, there shall be inserted “acquisition or”; and
(b) after the word “supply”, in the second place where it occurs, there shall be inserted “acquisition”.
20 (1) In subsection (1) of section 19 (relief from tax on importation of goods), after “of goods” there shall be inserted “from places outside the member States”.
(2) In subsection (1A)(a) of that section, after “imported” there shall be inserted “from a place outside the member States”.
(3) In subsection (2) of that section—
(a) after “any goods” there shall be inserted “from places outside the member States”; and
(b) at the end there shall be inserted “or removed from any member State”.
(4) In subsection (3) of that section—
(a) after “any goods” there shall be inserted “from places outside the member States”; and
(b) after “re-exported” there shall be inserted “or otherwise removed from the United Kingdom”.
21 (1) In subsection (1) of section 20 (refund of tax to local authorities and similar bodies)—
(a) the words “or on the importation of goods by” shall be omitted; and
(b) for “and the supply or importation” there shall be substituted “on the acquisition of any goods by such a body from another member State or on the importation of any goods by such a body from a place outside the member States and the supply, acquisition or importation”.
(2) In subsection (2) of that section—
(a) after the words “to or”, in the first and second places where they occur, there shall be inserted “acquired or”; and
(b) after those words, in the third place where they occur, there shall be inserted “acquisition or”.
22 After section 20 there shall be inserted the following section—
(1) Subject to subsection (2) below, where a person who is not a taxable person makes such a supply of goods consisting in a new means of transport as involves the removal of the goods to another member State, the Commissioners shall, on a claim made in that behalf, refund to that person, as the case may be—
(a) the amount of any tax on the supply of that means of transport to that person; or
(b) the amount of any tax paid by that person on the acquisition of that means of transport from another member State or on its importation from a place outside the member States.