Value Added Tax Act 1994, section 7

Place of supply of goods

Part I The charge to tax

(1)F39This section shall apply (subject to [F36sections F37... 18 [F38 , 18B and 57AF38,F36]] ) for determining, for the purposes of this Act, whether goods ... are supplied in the United Kingdom.

(2)Subject to the following provisions of this section, if the supply of any goods does not involve their removal from or to the United Kingdom they shall be treated as supplied in the United Kingdom if they are in the United Kingdom and otherwise shall be treated as supplied outside the United Kingdom.

(3)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.

F40(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F40(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F41 (5A)Goods whose place of supply is not determined under any of the preceding provisions of this section shall be treated as supplied outside the United Kingdom where the supply—

(a)meets the imported consignment condition in section 5A; and

(b)is deemed to be to the operator of an online marketplace.

(5B)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)they are supplied by a person in the course or furtherance of a business carried on by that person;

(b)the supply involves the goods being imported;

(c)the intrinsic value of the consignment of which the goods are part is not more than £135; and

(d)the consignment of which the goods are part—

(i)does not contain goods of a class or description subject to any duty of excise whether or not those goods are in fact chargeable with that duty, and whether or not that duty has been paid on the goods; and

(ii)is not a consignment in relation to which a postal operator established outside the United Kingdom has an obligation under an agreement with the Commissioners to pay any import VAT that is chargeable on the importation of that consignment into the United Kingdom.F41]

(6)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)F42their supply involves their being imported ...; and

(b)the person who supplies them is the person by whom, or under whose directions, they are so imported.

(7)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.

(8)For the purposes of the preceding provisions of this section, where goods, in the course of their removal from a place in the United Kingdom to another place in the United Kingdom, leave and re-enter the United Kingdom the removal shall not be treated as a removal from or to the United Kingdom.

F43(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F44 (9A)The Commissioners may by regulations substitute a different figure for a figure that is at any time specified in subsection (5B)(c).F44]

F45(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11)F46,F46,F46The Treasury may by order provide, in relation to goods ... generally or to particular goods ... specified in the order, for varying the rules for determining where a supply of goods ... is made.

[F47 (12)The Commissioners may by regulations provide that any rule for determining where a supply of goods is made is subject to such conditions relating to the notification of matters to the Commissioners, or such other conditions, as may be specified in the regulations.F47]

Definitions used in section 7 10

supplied

(3) In sub-paragraph (2), “supplied” is to be construed in accordance with Part 1 of the Electricity Act 1989 (see section 64(1) of that Act ).

Defined in Sch.7A para.A1 · see it in the full Act

(3) In sub-paragraph (2), “supplied” is to be construed in accordance with Part 1 of the Electricity Act 1989 (see section 64(1) of that Act ).

Defined in Sch.8 para.3 · see it in the full Act
the preceding provisions of this section

(6) Section 7 has effect as if the references in subsections (5A) to (7) to “the preceding provisions of this section” included sub-paragraphs (1) and (2) of this paragraph.

Defined in Sch.9ZB para.29(6) · see it in the full Act
operator

“operator”, in relation to an online marketplace, means the person who controls access to, and the contents of, the online marketplace provided that the person is involved in—

(a)

determining any terms or conditions applicable to the sale of goods,

(b)

processing, or facilitating the processing, of payment for the goods, and

(c)

the ordering or delivery, or facilitating the ordering or delivery, of the goods.

Defined in s.95A(1) · see it in the full Act

“operator”.

Defined in s.95A(3) · see it in the full Act
online marketplace

“online marketplace” means a website, or any other means by which information is made available over the internet, which facilitates the sale of goods through the website or other means by persons other than the operator (whether or not the operator also sells goods through the marketplace);

Defined in s.95A(1) · see it in the full Act
business

(1) In this Act “business” includes any trade, profession or vocation.

Defined in s.94(1) · see it in the full Act
postal operator

“postal operator” means a person who provides—

(a)

the service of conveying postal packets from one place to another by post, or

(b)

any of the incidental services of receiving, collecting, sorting and delivering postal packets;

Defined in s.96(1) · see it in the full Act
the Commissioners

“the Commissioners” means the Commissioners of Customs and Excise;

Defined in s.96(1) · see it in the full Act
VAT

“VAT” means value added tax charged in accordance with this Act;

Defined in s.96(1) · see it in the full Act
regulations

“regulations” means regulations made by the Commissioners under this Act;

Defined in s.96(1) · see it in the full Act
notification

“notification” means written notification, and

Defined in Sch.10 para.34(1) · see it in the full Act

Cases considering section 7 9

Arachchige v Revenue and Customs

[2010] EWCA Civ 1255 · 8 November 2010Defines

Section 7 provided the domestic framework for determining where supplies were made. The court considered the interaction between that framework and the Treasury’s Place of Supply Order. (see paras [12]-[13]) Section 7(10) supplied the default rule that services were made in the United Kingdom if the supplier belonged there, and elsewhere if the supplier belonged elsewhere. The phone-card supply was ultimately treated as a UK service. (see paras [12]-[13]; [47]-[49]) Section 7(10)(a) reflected Article 9(1) and located a service in the United Kingdom where the supplier belonged there. The appellant’s UK establishment placed him within that rule. (see paras [12]-[13]) Section 7(11) authorised the Treasury to vary the statutory place-of-supply rules by order. The appeal therefore turned on the proper construction of Article 21 of the Place of Supply Order. (see paras [12]-[13])

HM Revenue & Customs v Prince Karunaraina Samarappulli Arachchige

[2009] EWHC 1077 (Ch) · 20 May 2009

The court applies the primary rule that a service supplied by a supplier belonging in the United Kingdom is treated as supplied in the United Kingdom. The respondent belonged in the United Kingdom, so his supplies were UK supplies. (see paras [7]; [23]; [26]) The provision permits the Treasury to vary the place-of-supply rule by order. It provides the statutory basis for considering article 21 of the Place of Supply Order. (see paras [8]; [23])

Revenue and Customs v Zurich Insurance Company

[2006] EWHC 593 (Ch) · 23 March 2006Defines

Identified as applying to determine whether services are supplied in the United Kingdom for the purposes of the Act. (see para [18]) Applied so that a service supplied by a supplier belonging in another country was treated as made in that country. PwC AG therefore made its supply in Switzerland for domestic-law purposes. (see paras [18]; [27])

What each judgment says about section 7 is in the case-law panel in the full Act.

Amendments and notes

13 notes from legislation.gov.uk

Amendments

  1. F35Words in s. 7 heading inserted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 para. 3(5) (with Sch. 36 para. 19)
  2. F39Words in s. 7(1) omitted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 36 para. 3(2) (with Sch. 36 para. 19)
  3. F36Words in s. 7(1) substituted (1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 2; S.I. 1996/1249, art. 2
  4. F37Word in s. 7(1) omitted (31.12.2020) by virtue of Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 7(2) (with Sch. 8 para. 99) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7) this amendment is subject to savings and/or transitional provisions, see the commentary.
  5. F38Words in s. 7(1) substituted (with effect in accordance with Sch. 15 para. 8 of the amending Act) by Finance Act 2022 (c. 3), Sch. 15 para. 3
  6. F40S. 7(4)(5) omitted (31.12.2020) by virtue of Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 7(3) (with Sch. 8 para. 99) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7) this amendment is subject to savings and/or transitional provisions, see the commentary.
  7. F41S. 7(5A)(5B) inserted (17.12.2020 for specified purposes, 31.12.2020 in so far as not already in force) by Taxation (Post-transition Period) Act 2020 (c. 26), s. 11(1)(e), Sch. 3 para. 4(2) (with Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 9
  8. F42Words in s. 7(6)(a) omitted (31.12.2020) by virtue of Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 7(4) (with Sch. 8 para. 99) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7) this amendment is subject to savings and/or transitional provisions, see the commentary.
  9. F43S. 7(9) omitted (31.12.2020) by virtue of Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 7(5) (with Sch. 8 para. 99) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7) this amendment is subject to savings and/or transitional provisions, see the commentary.
  10. F44S. 7(9A) inserted (17.12.2020 for specified purposes, 31.12.2020 in so far as not already in force) by Taxation (Post-transition Period) Act 2020 (c. 26), s. 11(1)(e), Sch. 3 para. 4(3) (with Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 9
  11. F45S. 7(10) omitted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 36 para. 3(3) (with Sch. 36 para. 19)
  12. F46Words in s. 7(11) omitted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 36 para. 3(4) (with Sch. 36 para. 19)
  13. F47S. 7(12) inserted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 7(6) (with Sch. 8 para. 99) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7) this amendment is subject to savings and/or transitional provisions, see the commentary.