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VAT will be charged on calls made outside the EU

01 August 2017
Issue: 4610 / Categories: News

UK non-business users to be charged for mobile phones use outside the EU from 1 November.

HMRC has published a policy paper VAT: telecommunication services used outside the EU explaining the change to the place of supply rules for mobile telecommunication services made to UK non-business users when they use their mobile phones outside the EU.

Currently UK VAT is charged when UK consumers use their mobile phones in the EU. But because of the ‘use and enjoyment’ rule it is not charged when they use them outside the bloc. This is because mobile phone use in the EU is treated as taking place where the customer lives but use outside the EU it is treated as taking place where the service is consumed.

The UK adopted this approach before the EU implemented the existing place of supply rules for telecommunication services.

The agreed international approach is now to tax mobile phone use in the country where the user of the phone lives....

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