Value Added Tax Act 1994 section 39

Place of supply of goods: supplies facilitated by online marketplaces

Section 39 of Schedule 9ZE determines where, for VAT purposes, supplies of goods facilitated by online marketplaces are treated as taking place when the marketplace operator participates in a special scheme.

• This paragraph overrides the normal place of supply rules in section 7 for certain goods supplied through online marketplaces where the operator is in a special scheme.
• Where the marketplace operator facilitates a supply deemed to occur under section 5B(2)(a) — the deemed supply from the underlying seller to the marketplace — that supply is treated as taking place outside the United Kingdom.
• Where the marketplace operator facilitates a supply deemed to occur under section 5B(2)(b) — the deemed supply from the marketplace to the end customer — that supply is treated as taking place in the United Kingdom.
• The effect is that UK VAT is charged on the onward supply to the customer but not on the deemed supply into the marketplace, preventing double taxation while ensuring the correct amount of VAT is collected.