If a business is VAT registered, what VAT rate applies when selling to inside the EU?

If a business is VAT registered, what VAT rate applies when selling to inside the EU?

• A. Standard rate of VAT
• B. Zero rate of VAT
• C. Reduced rate of VAT
• D. No VAT charge

Answer: (B)

When a business that is VAT registered sells goods to customers within the EU, the applicable VAT rate is typically the zero rate of VAT. This means that while the sale is subject to VAT, the actual rate charged is 0%. This applies when the goods are being exported to VAT-registered businesses in another EU member state and the appropriate conditions are met, such as obtaining evidence that the goods have been dispatched from the UK. This zero-rating approach is beneficial for VAT-registered businesses as it allows them to remain competitive in the EU market while also enabling them to reclaim any input VAT that they may have incurred on their purchases related to the zero-rated sales, thereby preserving their cash flow. In contrast, the standard rate or reduced rate of VAT applies to domestic sales of goods and services within the home country, and "no VAT charge" would not typically apply to transactions involving businesses, except under specific exemptions which do not generally encompass standard inter-EU transactions.

When a business that is VAT registered sells goods to customers within the EU, the applicable VAT rate is typically the zero rate of VAT. This means that while the sale is subject to VAT, the actual rate charged is 0%. This applies when the goods are being exported to VAT-registered businesses in another EU member state and the appropriate conditions are met, such as obtaining evidence that the goods have been dispatched from the UK.

This zero-rating approach is beneficial for VAT-registered businesses as it allows them to remain competitive in the EU market while also enabling them to reclaim any input VAT that they may have incurred on their purchases related to the zero-rated sales, thereby preserving their cash flow.

In contrast, the standard rate or reduced rate of VAT applies to domestic sales of goods and services within the home country, and "no VAT charge" would not typically apply to transactions involving businesses, except under specific exemptions which do not generally encompass standard inter-EU transactions.