Certain services are chargeable to VAT in a country other than that in which the supplier is established in order:

1to implement the principle of territoriality, so that the place of supply is where the services are consumed; and

2to avoid distorting competition.

‘Basic rule’ for the place of ‘B2B’ supplies of services

From 1 January 2010, the ‘basic rule’ for the place of business-to-business (‘B2B’) supplies of services is the customer's location, rather than the supplier's location (VATA 1994, s. 7A(2)(a)).

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