VAT on goods purchased from UK company by Czech Republic company, resold to Danish company but goods kept in UK

[AP]

I work for  UK company.  we have a sister company in Czech Republic.  They have purchased goods from a UK company and need to recharge them to a customer based in Denmark.  However, the goods are kept in the customers warehouse in UK.

Are there any VAT implications for this situation as the goods will be permanently kept in UK?

[Trevor S]

The original supplier must charge UK VAT, as they aren’t exporting the goods. The Czech company is also making a taxable supply of goods in the UK, for the same reasons.

If the Czech company is not already registered for VAT in the UK, they may need to be. If they are a “Non-Established Taxable Person” (as defined in section 9 of HMRC Notice 700/1: https://www.gov.uk/government/publications/vat-notice-7001-should-i-be-registered-for-vat/vat-notice-7001-should-i-be-registered-for-vat#non-established-taxable-persons-netps-basic-information), they will be required to register for VAT because of this transaction alone – otherwise the normal VAT registration threshold applies.

[AP]

Hi Trevor.  Thank you very much for confirming this.  It is most helpful.

[Author]

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