VAT on toll manufacturing and processing

For companies operating global supply chains, the correct treatment for toll processing or manufacturing presents complex questions relating to title of the goods and countries involved.

Toll manufacturing is the outsourced re-processing or assembly of goods whilst the legal title of the goods is retained by the original company.  Where the work is being carried out across borders, the reporting and charging of any VAT or GST comes into play.  Factors to consider include:

  • are the goods being imported into the country or the EU for the first time, and who is acting as the importer of record?
  • is the toll manufacturer liable to charge VAT to its customer if a non-resident?
  • what are the VAT inward processing relief rules of the countries involved - are there free-trade areas?

Related to this area are the rules on warehousing of call-off or consignment stocks in foreign countries, which may also trigger VAT compliance requirements.  Click here to read about stock and VAT issues.

If you would like FREE guidance on the above issues, click here to contact TMF

Or contact us at:

enquiries@tmf-vat.com

Tel: +44 (0)870 067 8881
 
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