UK companies for EU VAT registrations

UK companies can be employed as vehicles for VAT registrations for goods or services supplied to or received from abroad.

Example (trading in goods):

A Chinese company incorporates a UK company A and A obtains a VAT registration.  A can despatch goods to business customers in other EU countries without adding VAT provided it quotes their VAT numbers on its invoices and goods leave the UK within a certain time.  Conversely, A can receive supplies of goods without VAT from its suppliers in EU countries known as an “intra-community acquisition”.  Importantly,  Co A can “import” goods from China to the UK for re-sale into Europe and having the UK VAT  registration means it can recover “import” VAT.   Without a VAT registration import VAT would still be payable but would become “irrecoverable” and would damage the bottom line by the VAT rate which varies between 15% to 25% across the EU.

Example (trading in services):

A US software services company registers a UK company B and VAT-registers B in the UK.  B can make B2B supplies without VAT throughout the EU and also “receive” VAT-free services from other EU member states subject to obtaining and providing VAT registration numbers.

Therefore UK companies can be used as VAT registration vehicles for international trading in goods or services.